Mortgage Refinance Calculator
Refinancing replaces your mortgage with a new one, usually to get a lower rate or to borrow against your equity. Lenders typically lend up to 80% of the home’s value. Enter the penalty your lender quoted; we don’t guess it.
Your home and mortgage
New monthly payment
$2,613.71
- Equity you could access (80% of value)
- $300,000
- New mortgage
- $477,500
- Penalty and fees
- $7,500
- Current payment (estimated)
- $2,897.62
Switching rates alone (no extra borrowing) saves about $227.45 a month, so the penalty and fees pay for themselves in about 33 months.
Estimates with semi-annual compounding. Penalty is the figure you entered, not our estimate.
Amortization schedule
First 2 years| Year | Paid | Interest | Principal | Extra | Balance |
|---|---|---|---|---|---|
| Year 1 | $31,364.52 | $20,559.31 | $10,805.21 | $0.00 | $466,694.79 |
| Year 2 | $31,364.52 | $20,079.75 | $11,284.77 | $0.00 | $455,410.02 |
Rate held at 4.39% for the whole amortization. Estimate only.
How refinancing works
Refinancing replaces your mortgage before the term ends. In Canada you can usually borrow up to 80% of your home’s value, so the equity available is 80% of the value minus what you owe. Breaking a closed term early costs a penalty: typically three months’ interest on a variable rate, and on a fixed rate the greater of three months’ interest or the interest rate differential. Only your lender can give you the exact figure.
Is it worth breaking my mortgage for a lower rate?
Say you owe $420,000 at 5.6% with 20 years left: $2,897.62 a month. Switching to 4.39% with a $6,000 penalty and $1,500 in fees added to the new mortgage makes the payment $2,670.17, saving $227.45 a month. The costs are paid back in about 33 months; if your term has longer than that left, the switch likely pays off. On a $900,000 home, up to $300,000 of equity would also be available to borrow.
What this estimate doesn’t include
- Your lender’s exact penalty, which depends on your contract and current posted rates.
- Approval: a refinance is a new mortgage, so the lender checks income, credit and an appraisal.
- Other options, such as a blend-and-extend with your current lender or a home equity line of credit.
- Rate changes when the new term ends.
Next steps
- Renewal calculator · compare with simply waiting for renewal
- Prepayment calculator · see what extra payments save instead
Calculations are estimates for general educational use and are not financial, mortgage, tax or legal advice, a lending offer or approval. Actual payments, qualification, rates, insurance, taxes and fees depend on your lender, contract and circumstances. Projections hold your entered rate constant after the term; future rates may differ.
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- PrepaymentHow much interest and time extra payments save.