- Home
- Calculators
- Prepayment penalty
Should I break my mortgage now — or wait?
Prepayment Penalty Calculator
Estimate your penalty (three months' interest or IRD) and compare it with what a lower rate would save over the rest of your term.
Reviewed by Stan Rashev, mortgage & real estate broker · Updated
Penalty vs savings over the rest of your term
Tip: drag the sliders, or click any figure to type an exact amount.
01 How this calculator works
The method, in plain language.
- 01Variable-rate mortgages usually charge three months' interest.
- 02Fixed-rate mortgages charge the greater of three months' interest or the interest-rate differential (IRD): your balance × (your rate − the comparison rate) × the time left in your term.
- 03Big banks typically compare against their posted rate minus the discount you received when you signed — which is why their penalties are often much larger. Monoline lenders usually use their current published rate.
02 What the numbers don't show
Read this before you decide.
- Your lender's exact formula is in your mortgage contract; ask them for a penalty statement before deciding.
- Porting your mortgage or a blend-and-extend can avoid the penalty entirely in some cases.
- Prepayment privileges you haven't used this year may reduce the penalty.
Turn the estimate into a plan.
This calculator answers one question. A 30-minute review looks at all of them together — and the answer is often different.
Book a strategy call03 Keep going
The solution behind the numbers
Renewal Strategy
Renewals come with payment adjustments. We review term selection, penalties and prepayment 9–12 months ahead so there are no surprises.
Explore What would consolidating my debt free up each month?Cash-Flow Restructure Calculator
See what folding cards, lines of credit and loans into your mortgage would free up every month — and what happens above 80% of value.
Open calculator How much of my equity can I actually use?Home Equity Calculator
Find out how much equity you can access, what it could fund and what it would cost each month — as a refinance or a line of credit.
Open calculator Will this rental property carry itself?Investment Property Calculator
Model a plex or rental: monthly cash flow, cash needed to close (including Montréal welcome tax), cap rate, cash-on-cash return and debt-service coverage.
Open calculator04 Start here
Request a confidential mortgage review.
Tell us what you're trying to solve. We'll come back within one business day with our read on the situation and the options worth considering — whether that's with us or not.
- A 30-minute conversation about your complete picture, not a rate quote
- No credit check to get started, and nothing to sign
- A minimum of 2–3 tailored options, explained in writing
- Your information is never shared with third parties
- Zero obligation or cost to you
Thank you — we're on it.
Stan or a member of the team will be in touch within one business day. If it's urgent, call (514) 994-1030.