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Mortgage Switch & Refinance Calculator

Compare your mortgage with a new rate, including the prepayment penalty and fees, and see what switching would save over the term.

$
%
%
$

Prepayment penalty, plus legal and appraisal fees

Years

More options· New loan length and cash back or fees covered

Years to pay it off

$

From the new lender

Switching saves you

$18,379

Over 5 years, after $3,000 of costs

New monthly payment
$2,678 (now $2,926)
Costs earned back
After 9 months

What this means

The interest you save covers the $3,000 of costs after 9 months. That’s within the 5 years you’d keep the new deal.

Next step

Stay or switch, over 5 years

StaySwitch
Monthly payment$2,926$2,678
Interest$114,575$93,196
Costs, less cashback$0$3,000
Interest and costs$114,575$96,196
Still owed after 5 years$389,002$382,521

Before you switch

  • At renewal you can switch lenders without a prepayment penalty, and many lenders cover the legal fees.
  • Breaking a fixed rate early can cost the interest rate differential (IRD), which is often far more than 3 months’ interest. Ask your lender for the exact amount.
Assumptions in this estimate
  • Both rates stay the same for the whole period. The saving counts interest and costs only: paying the loan off faster isn’t a cost, as that money becomes your home equity.
  • Interest is compounded twice a year, as on Canadian fixed-rate mortgages.
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How the calculator works

  1. Your mortgage now: what you owe, the years of amortization left and your rate.
  2. The new mortgage: its rate, the penalty and fees, and the length of the new term.
  3. Result: what you’d save in interest after costs over the term, your new payment, and when the costs are earned back.

Interest is compounded twice a year, as on Canadian fixed-rate mortgages.

Example

$450,000 left over 22 years, switching from 5.5% to 4.5% with $3,000 of penalty and fees:

Stay Switch
Monthly payment $2,926 $2,678
Interest over 5 years $114,575 $93,196
Penalty and fees $0 $3,000
Saving after costs $18,379

The costs are earned back after 9 months.

Before you switch

  • Start early: many lenders let you lock a rate up to 120 days before renewal.
  • Ask your lender to match: your current lender may lower its rate to keep you.
  • Get the penalty in writing before you break a term early.

Last updated

Frequently asked questions

When is switching my mortgage worth it?

When the interest you save over the term covers the penalty and fees. On $450,000 at 5.5%, switching to 4.5% with $3,000 of costs saves about $18,000 over a 5-year term.

How much is the prepayment penalty?

On a variable rate, it’s usually 3 months’ interest. On a fixed rate, it’s usually the higher of 3 months’ interest and the interest rate differential (IRD), which can be much more. Ask your lender for the exact amount.

Can I switch lenders at renewal?

Yes. At the end of your term you can move to another lender without a prepayment penalty, and many lenders pay the legal and appraisal fees for switches.

What’s the difference between switching and refinancing?

A switch moves the same mortgage to a new lender or rate. A refinance changes the mortgage, for example borrowing more against your home, and usually means requalifying and paying legal fees.