Mortgage Refinance
Calculator —
see your savings now.
Enter your current mortgage and a new rate to instantly see your monthly saving, break-even timeline, and total interest cost — penalty included.
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Refinancing a Canadian mortgage makes financial sense when your net saving — rate reduction minus the prepayment penalty — is positive. The IRD (Interest Rate Differential) penalty can reach 3–4% of the remaining balance on a fixed-rate mortgage broken mid-term; variable mortgages typically charge only 3 months' interest. This calculator models the break-even timeline so you can decide whether refinancing now beats waiting until renewal.
Mortgage refinance calculator: will refinancing actually save you money?
Refinancing pays off when the interest you save is more than the penalty to break, plus fees. On a fixed mortgage the penalty can be large, so sometimes waiting until renewal is cheaper.
Your numbers
Lifetime cost of the new mortgage
Total interest vs. principal over the full 25-year amortization at 4.14%
Mortgage Squad Advisors · FSRA #13737 · Licensed in Ontario only.
Your inputs and results in one page you can keep.
Read the full explanationThe rules behind the numbers, with worked examples.
Break-even is the whole game
Refinancing mid-term in Canada almost always means paying a prepayment penalty to break your existing contract. On a fixed mortgage that penalty is usually the greater of three months’ interest or the Interest Rate Differential (IRD), and at a Big-6 bank, posted-rate IRD can run into five figures. The refinance only makes sense when the interest you save over the remaining term clearly exceeds that penalty plus legal, appraisal and discharge fees.
The honest break-even test
We divide your total switching cost (penalty + fees) by your monthly interest savings to get a break-even in months. If you’ll stay in the home past that point — and past your remaining term — the math wins. If break-even lands beyond your remaining term, you’re usually better off waiting until renewal, when switching lenders carries no penalty at all.
One trap worth watching: re-amortizing back to 25 or 30 years lowers your payment but can add tens of thousands in lifetime interest, as the donut above makes plain. A blend-and-extend with your current lender, or keeping your existing remaining amortization on the new mortgage, can capture the rate savings without resetting the clock.
Payment frequency — pay less interest
Accelerated schedules slip in one extra monthly payment a year — shrinking interest and your timeline.
Amortization schedule
How your balance falls — and how the interest/principal split shifts — over 25 years.
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | $10,760 | $18,652 | $448,540 |
| 2 | $11,210 | $18,202 | $437,330 |
| 3 | $11,679 | $17,733 | $425,652 |
| 4 | $12,167 | $17,245 | $413,484 |
| 5 | $12,676 | $16,736 | $400,808 |
| 6 | $13,206 | $16,205 | $387,602 |
| 7 | $13,759 | $15,653 | $373,843 |
| 8 | $14,334 | $15,078 | $359,508 |
| 9 | $14,934 | $14,478 | $344,574 |
| 10 | $15,559 | $13,853 | $329,016 |
How to use this calculator
- Enter your current mortgage detailsInput your outstanding balance, current interest rate, and remaining amortization. Add your estimated prepayment penalty (3 months' interest is a safe floor) plus anticipated closing costs.
- Enter your new mortgage termsInput the new rate you've been quoted and your target amortization period. The calculator instantly shows your monthly saving, break-even timeline, and total interest comparison using standard Canadian semi-annual compounding.
- Book a free call to lock in your exact numbersOur calculator uses standard formulas — your actual penalty depends on your lender's IRD method. Call us and we'll calculate your precise penalty and net savings before you commit a dollar.
How this is calculated
When does refinancing a Canadian mortgage make sense?
How is the prepayment penalty calculated?
What's a healthy break-even on a refinance?
How much equity can I extract on a refinance?
Does refinancing restart my amortization clock?
Is blend-and-extend a real alternative to refinancing?
Should I refinance or just wait for renewal?
How does the mortgage refinance calculator work?
How accurate is the break-even estimate?
What prepayment penalty should I enter?
When does refinancing make financial sense?
Can I roll the penalty and closing costs into the new mortgage?
What is the maximum I can borrow when refinancing?
Want a real rate for these numbers?
Bring us a written offer from a big bank. We’ll try to beat it. If we can’t, we pay you $500. Conditions apply. See the conditions
Refinance help across Ontario
Our mortgage advisors across Ontario help homeowners refinance at a better rate — find a broker in your city.