Hey there, welcome to GRS!
The first thing I want to highlight is what peachy already mentioned: You can't get out of debt by borrowing more money. Consolidating debt at a lower rate can
save you money and get you debt-free faster, but only
if you correct the underlying behaviours that got you into debt in the first place. Running up a bunch of debt after you've cleared off the cards will only leave you worse off than when you started. You have to be committed to paying them off, and leaving
them paid off.
That said, I think I can help you with some of the mechanics of this. I'm Canadian, and I've been through a few mortgage refinances.
The first thing to consider is the penalty for breaking your current mortgage. It'll likely be 3 month's interest, or an interest rate differential, whichever is higher. 3 month's interest would be around $2,000 ($150k @ 5.5% * 3 months).
The interest rate differential, on the other hand, would be killer. I'm assuming your current mortgage is a 5-year term. You said you're halfway through it, so you're looking at 30 months difference. If you could refinance at 4%, you're looking at a differential of 1.5% (5.5% - 4.0%), which works out to $5,625. Now, they may calculate that based on the decreasing balance, so it could actually be a bit less than that, but without knowing your amortization and terms of your current mortgage, that's a worst-case scenario guess.
Next, you'd have to factor in CMHC. Currently, your loan-to-value is 70% (assuming the lower valuation of $215k and a balance of $150k). To avoid paying CMHC, you'd have to keep your loan-to-value below 80%. If you roll the $5,600 IRD penalty into the re-fi, that means you could still borrow $16,000 in equity ($172,000 max mortgage to stay below 80% LTV, minus $150,000 current mortgage balance, minus $5,600 penalty for breaking current mortgage).
Is $16,000 enough to pay off your credit cards? According to your follow up post, you have $31,000 in debt, so the re-fi would only pay off half your debt.
To be honest, I'm not even sure you could qualify for a new mortgage right now. Banks don't want to see more than 40% of your income going to debt repayment, and unless you've got a great income, it looks like you're probably already pretty close to the limit.
To take out enough to pay off your loans and cover the penalty, you'd have to re-fi up to $186,600 ($150,000 current mortgage + $5,600 penalty + $31,000 debt). That puts your LTV at 87%, which would mean you'd have to pay a CMHC premium of 2%, or $3,700 (which I'm guessing would also go right back onto the mortgage).So even though your interest rates are brutal ($18k @ 18%? Ouch!), I'd not do the re-fi.
You'd be taking a $5,600 penalty for breaking your current mortgage, you might not even qualify, and it wouldn't even be enough to pay off your debt (unless you were willing to pay for CMHC insurance, which would add another $3,700 to the mortgage). Basically, you'd be paying $9,300
in penalties and premiums to avoid some credit card interest. I suppose if you took forever to pay off the credit cards, it could work out to be worth it, but I'm pretty sure you can pay them off fast enough so that the total interest you pay is less than $9,300.
I'd cut your lifestyle, work on your network (in case your shaky job situation unravels), skip going back to school, put retirement savings on hold, and throw every spare penny at those credit cards.
Hope this helps, let us know what you decide to do and how it works out. Hope to see you around here more, this is a very friendly group! Except for that "DoingHomework" guy, watch out for him.