Canada
Canada refinance calculator
Compare your current mortgage to a new rate at renewal — new payment, break-even on costs, and lifetime savings, with semi-annual compounding.
Refinance outcome
$260.20
Monthly savings
- New monthly payment
- $1,879.21
- Current payment
- $2,139.40
- Break-even point
- 1 yr 4 mos
- Lifetime savings (net of costs)
- $12,652
If your new rate lands differently
Quoted rates move before you lock. Here is the same comparison at a few nearby rates — nothing here is a prediction.
| New rate | Monthly | Break-even |
|---|---|---|
| 6.00% | −$354.93 | 1 yr |
| 6.25% | −$307.80 | 1 yr 1 mo |
| 6.50%(quoted) | −$260.20 | 1 yr 4 mos |
| 6.75% | −$212.12 | 1 yr 7 mos |
| 7.00% | −$163.59 | 2 yrs 1 mo |
An estimate to help you plan — not financial advice or a loan offer. An estimate of principal & interest only — your actual savings depend on closing costs, loan type, and how long you stay. Not a lending offer.
Refinancing in Canada usually means breaking your current term early — and that triggers a prepayment penalty: the greater of three months' interest or the interest rate differential (IRD). Whether moving to a lower rate is worth it depends on that penalty versus the interest you'd save. This calculator weighs it up.
How this calculator works
Breaking a mortgage costs a penalty: three months' interest for a variable rate, or for a fixed rate the greater of three months' interest and the IRD — which can be large if rates have fallen since you signed.
Against that one-off cost you set the interest saved by moving to a lower rate over your remaining term. If the savings clear the penalty, refinancing makes sense.
At renewal — the end of your term — there's no penalty, which is why many Canadians wait rather than break mid-term.
A worked example
Breaking a $450,000 mortgage at 6% — the three-months'-interest penalty:
- Three months' interest
- $6,750
- Fixed-rate penalty
- greater of this or the IRD
For fixed rates the IRD can be much higher than three months' interest — get your lender's exact figure before breaking.
Who it's for
- You're deciding whether to break your term early.
- You want to estimate the prepayment penalty.
- You're comparing refinancing now against waiting for renewal.
Frequently asked questions
What's the penalty to break a Canadian mortgage?
For a variable rate, three months' interest. For a fixed rate, the greater of three months' interest or the interest rate differential (IRD).
What is the interest rate differential (IRD)?
A penalty based on the gap between your rate and the lender's current rate for the remaining term. When rates have dropped since you signed, the IRD can be substantial.
Should I refinance now or wait for renewal?
If breaking early saves more interest than the penalty costs, refinance now. Otherwise, waiting until renewal avoids the penalty entirely.
Is it cheaper to break a variable-rate mortgage?
Usually — variable-rate penalties are limited to three months' interest, whereas fixed-rate IRD penalties can be far larger.