Mortgage Refinance Calculator (Canada)
Canadian refinance savings net of penalties — IRD vs 3-months-interest, the 80% refi cap and renewal-window strategy.
Formula
Disclaimer: Compares equal remaining tenures; lender-specific charges and rate resets can change outcomes. Not financial advice.
Disclaimer: This tool is for general informational and estimation purposes only and is not professional financial, tax, accounting or legal advice. All figures are estimates — verify with a qualified professional before making decisions. Read the full disclaimer.
Need mortgage refinance calculator results fast? Skip the spreadsheet and get a clear, defensible answer in one step — free, private and instant, recalculating live as you change any input.
About Mortgage Refinance Calculator (Canada)
Canadian refinancing lives or dies on the PENALTY: breaking a fixed mortgage costs the greater of three months' interest or the Interest Rate Differential — and big-bank IRD, computed off posted rates, can hit five figures, while variable-rate mortgages cap at the gentle three-months figure. The defaults assume $380,000 at 6.4% moving to 5.1% with $4,500 of total switching costs (penalty, legal, appraisal); plug YOUR lender's written penalty quote into the fees field — it's the entire decision. Structural rules to know: refinancing (as opposed to switching at renewal) caps at 80% LTV and forfeits insured-mortgage status; a straight SWITCH at renewal — same balance, new lender — usually prices better and incurs no penalty at all, with many lenders covering transfer costs to win the loan. So sequencing is strategy: if your renewal sits within 6–12 months, a blend-and-extend with your current lender or simply waiting for the renewal window often beats paying an IRD today; this calculator quantifies whether the rate gap justifies impatience. When you do break: penalties are sometimes capitalizable into the new loan (you'll pay interest on the penalty — add it mentally), monoline lenders' fair-IRD math makes their FUTURE penalties cheaper too (a reason to leave big-bank posted-rate regimes), and prepayment privileges (10–20%/year) exercised right before breaking shrink the balance the penalty is computed on — a phone call worth thousands at IRD-heavy banks.
How to use Mortgage Refinance Calculator (Canada)
- 1Enter Outstanding balance, Current rate (%), New rate on offer (%), Remaining tenure (years), Penalty + legal + appraisal costs into the Mortgage Refinance Calculator.
- 2The result is computed automatically using Saving = (EMI_old − EMI_new) × remaining months − switching costs ; Break-even = costs ÷ monthly saving — there is no button to press; it updates live as you type.
- 3Change any input to model a different scenario, then use “Copy result link” to share the exact numbers.
Why use Mortgage Refinance Calculator (Canada)?
- ✓Computes mortgage refinance calculator instantly with the correct formula — no spreadsheet needed
- ✓100% free and unlimited, with no sign-up, login or paywall
- ✓Runs entirely in your browser, so the figures you enter are never uploaded or stored
- ✓Shows the formula, a live worked example and references so you can defend the number
Frequently asked questions
How do I find out my exact penalty?+
Call your lender for a written payout statement — they must provide it, valid for ~30 days. Big-bank fixed IRD quotes routinely surprise (posted-rate math inflates them); variable-rate penalties are just 3 months' interest (~$6,000 at the defaults). Re-run this calculator with the real figure; everything else is folklore.
Should I wait for renewal instead of refinancing now?+
Compute both: (savings refinancing today, net of penalty — the verdict above) versus (full savings starting at renewal with zero penalty). Within ~12 months of renewal, waiting usually wins unless the rate gap is large or you need equity out now. Some lenders' blend-and-extend captures part of the gap penalty-free meanwhile.
Can I take equity out when refinancing in Canada?+
Up to 80% LTV on an uninsured refi — the standard route for renovation or consolidation funds. Note it permanently sheds CMHC-insured status (insured rates are often BETTER), and the whole new balance prices at today's rates. For smaller amounts against a good existing rate, a HELOC second position may preserve more value.
Do prepayment privileges help before breaking?+
Materially: most contracts allow 10–20% lump prepayment per year penalty-free — exercising it days before breaking shrinks the balance on which the IRD/3-month penalty is computed. On a $380,000 mortgage with 15% privilege, that's penalty computed on $323,000 instead — often $700–2,000 saved for one transfer.
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