Refinance Breakeven & Penalty Analyzer
Compare an estimated mortgage penalty and refinance costs with a possible borrowing-cost breakeven.
Before you use this tool
What it estimates
Compare an estimated mortgage penalty and refinance costs with a possible borrowing-cost breakeven.
Who it is for
Ontario homeowners deciding whether a refinance comparison may justify requesting a written payout statement.
Numbers you need
Use the scenario details requested in the calculator inputs below.
What the result means
The result is an educational estimate based only on the numbers entered.
Next step
Use the estimate to prepare better questions before making a mortgage decision.
Review my mortgage numbersEnter your penalty — this tool does not calculate one for you
A lender's interest-rate-differential formula depends on contract-specific comparison rates that are not publicly known, so no calculator can reproduce it reliably. Enter a figure from a written payout statement, or use the simplified three-months-interest and IRD illustration in the mortgage penalties guide to estimate one yourself.
Total refinance cost
$6,000
New estimated payment
$1,891
Monthly payment change
$162
Estimated breakeven
3 yr 2 mo
$8,104 lower estimated cost over 5 years
This compares remaining interest on the current mortgage with the entered penalty, fees, and proposed refinance interest over the planning horizon you entered. It assumes every entered rate, amortization, and cost remains unchanged. A lower payment does not by itself establish a lower total cost.
- Current mortgage payment
- $2,053/month
- Keep current mortgage (5-year interest)
- $75,486
- Proposed refinance + entered costs
- $67,382
- Total refinance cost entered
- $6,000
Monthly payment change
Estimated payment falls by $162 per month at the new rate and amortization.
Breakeven vs. planning horizon
Estimated breakeven is 3 yr 2 mo, inside the 5-year horizon entered.
Total cost over the horizon
Including the entered penalty and fees, the refinance shows $8,104 lower estimated cost than keeping the current mortgage over 5 years.
Frequently asked questions
Why doesn't this tool calculate my penalty for me?
A lender's interest-rate-differential formula uses contract-specific comparison rates that aren't publicly available, so no calculator can reproduce it reliably. Enter the penalty from a written payout statement, or use the simplified three-months-interest and IRD illustration in the mortgage penalties guide to estimate one yourself.
What counts as "other fees" in the total refinance cost?
Typically legal fees, discharge or registration costs, an appraisal fee, and any lender or broker administration fees. Confirm which apply to your specific transaction — not every lender charges every fee, and some may be waived or added to the mortgage instead of paid up front.
What does the breakeven period actually mean?
It is the estimated number of months of payment savings needed to offset the entered penalty and fees, based on the rate, balance, and amortization you entered. If you expect to sell, refinance again, or pay off the mortgage before that point, the entered refinance may not have time to recover its own cost.
Why do I need to enter a planning horizon?
Breaking even eventually is not the same as it being worth it for your situation. The planning horizon lets the comparison reflect how long you actually expect to keep the mortgage, rather than assuming an indefinite time frame.
Does a shorter breakeven period mean I should refinance?
Not automatically. This tool illustrates the entered numbers only — it does not know your future plans, other lender offers, portability options, or blend-and-extend alternatives. Review the full mortgage, not just the payment change, before deciding.