Mortgage Refinance Calculator

How to use this refinance calculator

Enter your current mortgage's remaining balance, rate and years left on the amortization; your latest mortgage statement has all three. Then enter the new rate you've been quoted, the new amortization, and the total cost of switching: your lender's prepayment penalty quote plus legal, appraisal and discharge fees. The verdict card weighs the break-even point and lifetime savings together.

The math that decides

Break-even months = penalty and refinance costs ÷ monthly payment savings

• Monthly savings — old principal-and-interest payment minus the new one (both computed with Canadian semi-annual compounding)
• Lifetime net savings — interest remaining on the current mortgage minus (total interest on the new mortgage + costs), assuming each rate stayed the same for the full amortization

Why a lower rate can still lose

Refinancing a mortgage with 20 years left into a new 30-year amortization restarts the clock: your balance, which was finally shedding principal quickly, goes back to mostly-interest payments for years. The monthly payment drops seductively, yet total interest can rise. The fix when that's true: keep the amortization the same or shorter, or keep paying the old payment amount on the new mortgage. Want to see where your current loan stands? Run it through the mortgage calculator and look at the yearly schedule.

What this calculator doesn't include

Property taxes and home insurance are excluded, and the penalty is only included if you add it to the costs field. In Canada, breaking a fixed-rate mortgage early typically costs the greater of 3 months' interest or the Interest Rate Differential (IRD), which can be thousands of dollars. Get the penalty quote from your lender before counting on any savings; it can wipe out a marginal refinance. The math here also assumes you hold to maturity rather than renewing every term as Canadian mortgages do.