Should I Refinance My Calgary Mortgage?
Quick Answer
Refinancing makes sense when the interest savings over your remaining amortization exceed the penalty and costs of breaking your current mortgage. Use this step-by-step tool to find out if it's worth it for your situation.
Calculator
Step 1: Tell us about your current mortgage
How It Works
The decision to refinance comes down to a simple equation: total interest saved − penalty = net benefit. If net benefit is positive and the break-even period is shorter than your remaining term, refinancing makes financial sense.
Key factors that affect the decision:
- Rate difference: Larger drops mean bigger savings
- Balance: Higher balances amplify both savings and penalties
- Time remaining: More time left = more potential savings
- Mortgage type: Variable penalties are much lower than fixed IRD
Real Calgary Scenarios
Clear Win
Large rate drop, lots of time
6.29% → 4.29% • 48 months left
Close Call
Small rate drop, short term
5.29% → 4.79% • 24 months left
Wait it Out
Near renewal, just wait
5.49% → 4.99% • 8 months left
Frequently Asked Questions
When does refinancing make financial sense?
When the total interest saved over your remaining amortization exceeds the penalty cost. Generally, a rate drop of 0.75%+ on a balance above $300,000 with 24+ months left in the term is worth investigating.
What's the biggest mistake people make when refinancing?
Not accounting for the penalty being added to the new mortgage balance. Your penalty increases your principal, which increases your new payments. Always compare the net savings, not just the rate difference.
Can I negotiate my penalty?
Not directly — penalties are set by your mortgage contract. But you can ask about a blend-and-extend (your lender blends your current rate with a new rate). You can also port your mortgage if buying a new property.
How long should I plan to stay in my home after refinancing?
At minimum, long enough to reach break-even. If your penalty is $8,000 and you save $400/month, you need 20 months minimum. Add a cushion — plan for at least 1.5× the break-even period.
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