How accurate are these mortgage calculators?

Our calculators use the same formulas used by mortgage professionals across Canada, including IRD and 3-month interest penalty calculations.

What is a mortgage penalty?

A mortgage penalty is a fee charged when you break your mortgage contract early. It is typically the greater of 3 months interest or the Interest Rate Differential (IRD).

Should I refinance my mortgage in Ontario?

Refinancing makes sense when savings from a lower rate exceed the costs (penalty + legal fees). Our calculator helps determine your break-even point.

Mortgage Penalty Refinance Calculator

Calculate your break penalty, compare interest savings, and see if refinancing your mortgage is worth it.

How This Tool Works:

• Shows the true cost of breaking your mortgage early
• Compares interest savings vs. penalty and closing costs
• Calculates net benefit over the remaining term
• Important: All refinance costs (penalty, discharge fee, legal fees) are added to the existing balance on the Refinance Start Date

Current Mortgage (Today)

Current Balance ($)

Interest Rate (%)

Frequency

Initial Mortgage Payment ($)

Pmt Increase (Per Pmt)

Lump Sum (Annual)

Rem. Amort (Yrs / Mos)

Maturity Date

Required for Penalty Calculation

Refinance Start Date (Future Simulation)

Costs & Penalty

Auto-Calculate

Note: Auto-Calculate uses our internal calculation based on general lender formulas for this scenario. You can turn this off and input the exact penalty amount from your lender for a more accurate result.

Penalty Amount ($)

Lender's Posted Rate for Remaining Term (%)

Discharge Fee

Legal/Other Fees

New Balance:$0

New Mortgage

Refinance Strategy

Check "Match Payment" to display the amortization years used to match close to the original payment in the analysis output.

New Rate (%)

Use broker rate

New Term (Years)

Amortization (Years)

Payment Frequency

Extra Increase

Extra Lump Sum

Enter Your Mortgage Details

Fill in the form on the left to see your refinance analysis.

Results will appear automatically as you enter data.

Disclaimer:

Calculations: All calculations are estimates only and assume semi-annual compounding (standard Canadian mortgage practice).

Penalty Calculations:

Variable Rate Mortgages: Typically use 3 months of interest as the penalty (Balance × Rate × 3/12).
Fixed Rate Mortgages: Use the greater of (a) 3 months of interest, or (b) Interest Rate Differential (IRD). IRD = Balance × (Contract Rate - Comparison Rate) × Years Remaining.

Important: Actual lender penalty formulas vary significantly. Some use posted rates, others use bond yields or discounted rates. The IRD calculation method, comparison rate selection, and rounding can differ substantially between lenders. Always verify the exact penalty amount with your lender before proceeding.

Legal Notice: This tool and its outputs do not constitute financial, legal, or professional advice. Consult with qualified professionals before making any financial decisions.