Mortgage balance comparison
Current mortgage versus the selected refinance offer
Canada · CAD
Canada mortgage refinance calculator.
Compare your current mortgage with refinancing, including Canadian compounding, break penalties, costs, cash-out and stress-test scenarios.
Refinance offer comparison
Results include the estimated mortgage-break penalty and selected cost treatment
| Scenario | Rate | Amortization | Mortgage | Payment | Upfront cost | Break-even | Balance at horizon | Horizon result |
|---|
Rate sensitivity
How the selected refinance changes if its rate is higher or lower
| Rate change | New rate | Monthly payment | Break-even | Horizon result |
|---|
Planning estimate only—not a lender penalty quote, appraisal, tax calculation, mortgage approval or recommendation. Confirm payout statements, portability, blend-and-extend options, discharge costs and qualification requirements with the lenders involved.
Canadian refinancing guide
Should you refinance your mortgage in Canada?
Refinancing replaces or changes a mortgage before or at renewal, often to obtain a different rate, change the amortization, consolidate debt or access home equity. A lower rate does not automatically produce savings because mortgage-break penalties, legal and appraisal costs, a longer amortization and added borrowing can outweigh the payment reduction.
This calculator compares cash flow, the remaining balance and total cost over the number of years you expect to keep the new mortgage.
Canadian mortgage prepayment penalties
Breaking a closed mortgage before the end of its term normally triggers a prepayment penalty. The charge is often the higher of three months' interest or an interest-rate differential. IRD methods vary considerably and may use the contract rate, posted rates, the original discount, remaining term and present-value calculations.
Use a lender's written payout or penalty quote whenever possible. The simplified estimate here cannot reproduce every contract. The Financial Consumer Agency of Canada explains common penalty methods and disclosure.
Rate-and-term refinance
Changes the rate or amortization without taking substantial additional cash. Compare the new balance and total cost, not only the payment.
Cash-out refinance
Adds equity released as cash to the mortgage. Canadian refinancing is generally limited to 80% of the accepted property value.
Blend and extend
The existing lender may combine the current rate with a new rate and extend the term, sometimes reducing or avoiding a break penalty. Terms vary.
Renewal versus refinance
A simple renewal keeps the mortgage structure largely intact. Increasing the balance or amortization, or breaking the term early, can make the transaction a refinance.
Mortgage refinance stress test and LTV
Federally regulated lenders generally require a borrower refinancing a mortgage to qualify at the higher of 5.25% or the new contract rate plus two percentage points. The calculator shows the payment at that rate, but does not perform a full income, debt or credit assessment.
Home-equity borrowing is generally limited to 80% of appraised value. Review the federal guidance on mortgage stress testing and borrowing against home equity.
How to compare refinance offers
Break-even divides upfront refinancing costs by monthly payment savings. It is useful but incomplete: extending amortization can lower the payment while leaving a larger balance and increasing lifetime interest. The horizon comparison includes payments, upfront costs and remaining balances to give a broader view.
If the main goal is equity access, compare this page with the Canada home equity calculator. To test the payment after refinancing in more detail, use the Canada mortgage calculator.
Canada mortgage refinance questions
How much can I refinance in Canada?
Refinancing and other uninsured home-equity borrowing are generally limited to 80% of the property's accepted value, subject to lender approval.
How is a mortgage break penalty calculated?
For many closed mortgages it is the higher of three months' interest or an interest-rate differential. The exact contract and lender method control.
Do I need to pass the mortgage stress test when refinancing?
Generally yes at a federally regulated lender. The qualifying rate is normally the higher of 5.25% or the contract rate plus two percentage points.
Can refinancing lower the payment but cost more?
Yes. A longer amortization, financed fees, penalties or cash-out can reduce the monthly payment while increasing interest or the remaining balance.
Can I avoid a prepayment penalty?
An open mortgage generally has no break penalty. At renewal, a closed term can normally be repaid without a prepayment charge. Porting, blend-and-extend and prepayment privileges may also reduce costs, depending on the contract.
What is the refinance break-even point?
It is the time for monthly savings to recover upfront refinance costs. If you expect to sell or refinance again before that point, the transaction may not recover its costs.