647-905-0370
Mortgage Refinance Calculator

What Refinancing Actually Costs

Break a mortgage mid-term and you pay a prepayment penalty. On a variable rate, that is typically three months’ interest, a few thousand dollars on most balances. On a fixed rate, it is the greater of three months’ interest or the interest rate differential. The IRD is where people get hurt. It is calculated on the gap between your rate and the lender’s current rate for the remaining term, and on a large balance with several years left it can run into five figures. Different lenders calculate it differently, and some use posted rates in a way that inflates it substantially. Get the exact discharge figure from your lender in writing before you plan around anything. Do not estimate this one.

[mortgage_refinance_calculator]

This calculator provides estimates for general information only. Mandeep Dhesi is a licensed real estate professional, not a licensed mortgage broker or agent. Nothing on this page constitutes mortgage advice or an offer of credit. Rates, penalties and qualification depend on your lender, your credit and your property. Confirm all figures with your lender or a licensed mortgage professional before making a decision.

When Refinancing Makes Sense

Rate drop. The classic case. Works when the interest saved over the remaining term clears the penalty and legal costs with room to spare.

Debt consolidation. Rolling credit card balances at 20% into a mortgage at single digits changes your monthly cash flow immediately. The trap is the amortization. You have converted short-term debt into 25-year debt, and if the cards fill back up you are worse off than when you started.

Accessing equity. Most Canadian lenders will refinance up to 80% of the property’s appraised value. Homeowners use this for a down payment on an investment property, a renovation, or tuition.

Getting off a variable. If a variable rate has stopped being tolerable, refinancing into a fixed buys certainty. You are paying the penalty for sleep.

The 80% Rule

You can refinance up to 80% of your home’s appraised value in Canada. On a home appraised at $900,000, that ceiling is $720,000. If you owe $500,000, you have $220,000 of accessible equity before costs.

Refinancing above 80% is not available. Mortgage default insurance does not cover refinances, which is what caps it.

Refinance or Wait for Renewal?

If your renewal is inside a year, waiting is usually cheaper. At maturity the penalty disappears entirely, and you can restructure the mortgage at the same time you renew.

If your renewal is three or four years out and rates have moved meaningfully, run the break-even. That is what this calculator is for.

See our Mortgage Renewal Calculator to compare your options at renewal.

Mortgage Refinance Questions

You apply for a new mortgage, the new lender pays out the existing one, and you carry the new loan going forward. The lender verifies your income and credit, orders an appraisal, and the transaction closes through a lawyer or title company. If you are breaking a term, the penalty comes off the proceeds at closing. Start to finish, expect three to five weeks.

Yes, and it is one of the more common reasons Canadians refinance. You borrow against your equity, pay off the higher-interest balances, and carry one payment at the mortgage rate.

The monthly relief is immediate and real. The risk is that you have stretched consumer debt across a 25-year amortization, so the total interest paid can end up higher even at a much lower rate. It works when the cards stay paid off. It fails when they do not.

Any time, though the cost changes. Mid-term means paying a prepayment penalty. At renewal, refinancing costs nothing beyond legal and appraisal fees, because the term has ended and no penalty applies. If your renewal is close, wait for it.

You need to retain at least 20% equity after the refinance, so you can borrow up to 80% of appraised value. If your home appraises at $800,000, your total mortgage cannot exceed $640,000.
Slightly and briefly. The lender’s hard inquiry drops your score a few points, and the new account resets the age of that trade line. Both recover within months of on-time payments. If you are consolidating high-utilization credit card debt, the utilization improvement usually outweighs the inquiry within a cycle or two.

More Mortgage Calculators

Find the right calculators for all your mortgage and homebuying needs.

Mortgage Calculator

A mortgage payment calculator helps estimate your monthly mortgage payments, closing costs and overall affordability before buying a home in Canada. By adjusting factors like your home price, down payment, mortgage rate and amortization period, you can compare different borrowing scenarios and understand how they affect your monthly costs.

Rebate Calculator

A rebate calculator helps first-time buyers in Ontario estimate the rebates they may qualify for before purchasing a home. By entering details like your purchase price and buyer status, you can see your potential land transfer tax rebate and new-home HST rebate, giving you a clearer picture of your true upfront costs.

Land Transfer Tax Calculator

A land transfer tax calculator helps estimate the tax you’ll owe when closing on a home in the GTA. By entering your purchase price and location, you can see both your Ontario provincial and Toronto municipal land transfer tax, along with any first-time buyer rebates, so you can budget accurately for closing day.

CMHC Insurance Calculator

A CMHC insurance calculator helps estimate the mortgage default insurance you’ll need when buying a home with less than a 20% down payment in Canada. By adjusting your home price and down payment, you can see how your premium changes and understand how it adds to your total mortgage amount and monthly costs.

Affordability Calculator

An affordability calculator helps estimate how much home you can realistically afford in the GTA market before you start shopping. By adjusting factors like your income, existing debts and down payment, you can find your ideal price range and understand how each affects the monthly payment you’ll be comfortable with.

Mortgage Renewal Calculator

A mortgage renewal calculator helps estimate your new monthly payments when your mortgage term comes up for renewal in Canada. By adjusting factors like your remaining balance, new mortgage rate and amortization period, you can compare renewal offers and understand how a changing interest rate will affect your monthly costs.

Get Floor Plans & Prices