# What are the conditions for re-borrowing prepaid funds on Sagen-insured mortgages?

> Sagen's Mortgage Insurance Prepay and Re-Advance Policy allows borrowers to re-borrow prepaid principal under specific conditions, offering financial flexibility.

Category: Strategy
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/strategy/what-are-the-conditions-for-re-borrowing-prepaid-funds-on-sagen-insured-mortgages

## Answer
* Borrowers can use re-borrowed funds for any purpose without lender consultation.
* Funds are unavailable if the mortgage is in arrears for more than one month of payments.
* Funds are unavailable if, during the previous 3 months, the mortgage was in arrears for more than one month of payments.
* Property taxes for the current year must be paid up to date.

## Institutional highlights
- Think of re-borrowing prepaid funds as a way to access extra cash, not a solution if you're struggling to make payments.
- You can only re-borrow up to the amount you've prepaid, and your total mortgage balance can't go above what it would have been if you hadn't made extra payments.
- If you take over someone else's insured mortgage, you can't re-borrow any extra payments they made.
- A mortgage prepayment is any extra payment you make on your mortgage, beyond your regular scheduled payments. This includes both lump-sum payments and increasing your regular payment amount.

## Related guide
- https://ratellow.com/guides/mortgage-prepayment-privileges

## Sources
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- Mortgage Insurance Prepay and Re-Advance Policy — https://www.sagen.ca/ups/underwriting-documentation/#mortgage-insurance-prepay-and-re-advance-policy-638f55989d20b
- Disclosure requirements — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#3.1