Calgary Refinance Calculator
Quick Answer
To decide if refinancing makes sense, compare your break penalty (3-month interest for variable, or the greater of 3-month interest and IRD for fixed) against the interest you'll save at the new rate. If net savings are positive after the penalty, refinancing is worth it.
Calculator
Used for IRD calculation (fixed only)
Break Penalty
$5,490
✅ Refinancing saves you $49,624 over the remaining amortization.
💡 What This Means for You
Fixed rate penalties are the greater of 3-month interest or the IRD (Interest Rate Differential). You'll recover the penalty in 30 months of savings.
How It Works
Variable rate: Penalty is always 3 months of interest on your remaining balance.
Fixed rate: Penalty is the greater of 3 months interest OR the Interest Rate Differential (IRD). IRD = (your contract rate − current posted rate for remaining term) × balance × months remaining / 12.
The penalty is added to your new mortgage balance, so your new payments reflect the penalty cost.
Real Calgary Scenarios
Small Rate Drop
5.49% → 4.99%
$4,804
estimated penalty
Big Rate Drop
6.29% → 4.49%
$6,290
estimated penalty
Variable Break
5.79% → 4.79%
$4,343
estimated penalty
Frequently Asked Questions
How is the mortgage break penalty calculated in Canada?
For variable rates: 3 months of interest. For fixed rates: the greater of 3 months interest or the IRD (Interest Rate Differential). The IRD compares your contract rate to the lender's current rate for your remaining term.
Is it worth refinancing for a 1% lower rate?
It depends on your balance, remaining term, and penalty. On a $400,000 balance, a 1% rate drop saves roughly $4,000/year in interest. If your penalty is $8,000, you break even in about 2 years.
Can I avoid the penalty?
You can avoid penalties by waiting until renewal, porting your mortgage when moving, or using a blend-and-extend with your current lender. Some lenders also offer lower penalty calculations.
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