One broker believes clients will have to turn to high interest loans as a result of refinance loan-to-value limits – and that these high interest loans may become more ubiquitous as a result.

“I’m afraid we might see a resurgence of high rate refinance companies as a result of CMHC’s 80 per cent loan-to-value cap,” John Lozinski of Verico Lozinski Mortgage Corp. told MortgageBrokerNews.ca. “Some people need to refinance for legitimate reasons and if they want to pass that 80 per cent threshold they will need to take on other loans.”

According to Lozinski, a number of U.S.-based companies specializing in high rate refinance loans were popping up across Canada before the economic downturn forced them back out of the market.

However, he fears they may return as economic conditions continue to improve south of the border.

Lozinski also points to Citi Financial’s high interest personal loans as one of the options certain Canadians must consider due to the government-sanctioned LTV restrictions for refinances.

According to Citi Financial’s website, it offers personal loans up to $20,000 at rates that range from 24.99 per cent to 35.99 per cent on 60 month terms.

Refinances dropped by 40 per cent in 2011, as a result of mortgage rule changes.

More recently, the Crown Corporation conducted a survey of 3,510 recent mortgage consumers and determined that 20 per cent had refinanced their mortgage.

For his part, John Greenlee of the Mortgage Centre believes there are still options for clients who require higher than 80 per cent LTV refinance.

“Obviously you run into clients who want to go above 80 per cent; some lenders offer cash back options and sometimes that’s enough,” he said. “Citi Bank offers high interest loans and I’ve had clients come in to refinance and get out of those loans.”