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Canadian mortgage calculator

Canadian mortgage penalty estimator

Compare an approximate three-month-interest charge with an interest rate differential.

Private inputs · Transparent assumptions

Your decision ledger

Mortgage penalty

Change the assumptions below. Your inputs and results remain in this browser and are not sent to RateReset.

  1. 01Facts
  2. 02Change
  3. 03Compare

Enter your values to see results.

How to use this result

Start with the decision, then inspect the assumptions.

A prepayment charge can affect the economics of refinancing or breaking a mortgage. Variable mortgages are often estimated with three months’ interest. Closed fixed mortgages may use the greater of that amount and an interest rate differential, but lender definitions vary materially.

How the calculation works

Three months’ interest is balance multiplied by contract rate multiplied by three-twelfths. The simplified IRD multiplies balance by the positive difference between an adjusted contract rate and comparison rate for the months remaining.

For the full notation, rate conversion, rounding approach, and limitations, see the calculation methodology.

Worked Canadian example

Put the estimate in context

For a CA$400,000 balance at 5.00%, three months’ interest is approximately CA$5,000. With two years remaining and a 3.50% comparison rate, the simplified IRD is approximately CA$12,000 before lender-specific discount or posted-rate rules.

Before relying on it

Common mistakes

  1. 01Using today’s best rate when the lender uses a posted or term-comparison rate.
  2. 02Omitting the original rate discount from an IRD method that adds it back.
  3. 03Forgetting discharge, appraisal, legal, or cashback-clawback costs.
  4. 04Treating this estimate as a payout statement.

Clear answers

Frequently asked questions

Why can lender quotes differ so much?

Contracts define comparison rates, discounts, remaining term treatment, and timing differently. Ask the lender for a written payout statement.

Does this include other discharge costs?

No. Legal, registration, administrative, cashback, and refinancing costs are separate.

Continue comparing

Related calculators

Fixed vs variableCompare user-defined fixed and variable rate paths without pretending to predict interest rates.Mortgage renewalEstimate your payment after renewal and compare a longer amortization, a lump sum, and your current remaining schedule.PrepaymentCompare dated lump sums, recurring increases and accelerated payments across the current term and a long-term projection.

Official references

Sources used

Full source registry

Estimates are for educational purposes and may differ from lender calculations, contractual terms, taxes, fees, or regulatory requirements. Read the full disclaimer.

Last reviewed July 26, 2026. Content is marked for financial and compliance editorial review before material policy changes are published.