Canadian Refinance Calculator
See how refinancing changes your mortgage — your current loan against a new rate, including payments and total interest in CAD.
CA Refinance Calculator
Compare your current mortgage against a new rate · CAD
Loan Comparison
P&I · CADYour refinance summary
A plain-English read of the difference between your current loan and the new loan, based on the inputs above. Figures use Canada's semi-annual compounding convention for fixed mortgages and are estimates only.
Interest paid over time
Estimated cumulative interest paid on the current mortgage versus the new mortgage across the term. The gap between the lines is the estimated interest difference. Based on the inputs and Canada's semi-annual compounding convention for fixed mortgages.
| Measure | Current loan | New loan | Difference |
|---|---|---|---|
| Monthly payment | CAD 2,965 | CAD 2,740 | −CAD 226 |
| Term | 25 yrs | 25 yrs | same |
| Total interest | CAD 389,564 | CAD 321,891 | −CAD 67,673 |
| Total repaid | CAD 889,564 | CAD 821,891 | −CAD 67,673 |
Repayment at different new rates
Estimated monthly payment and monthly saving at a range of new interest rates, compared with your current rate and balance. The row matching your entered new rate is highlighted. Based on the inputs only.
| New Rate | Monthly Repayment | Monthly Saving | Annual Saving |
|---|---|---|---|
| 3.70% | CAD 2,549 | CAD 416 | CAD 4,989 |
| 3.95% | CAD 2,617 | CAD 349 | CAD 4,184 |
| 4.20% | CAD 2,685 | CAD 281 | CAD 3,367 |
| 4.40%Your new rate | CAD 2,740 | CAD 226 | CAD 2,707 |
| 4.45% | CAD 2,753 | CAD 212 | CAD 2,541 |
| 4.70% | CAD 2,823 | CAD 142 | CAD 1,704 |
| 4.95% | CAD 2,894 | CAD 71 | CAD 857 |
| 5.20% | CAD 2,965 | CAD 0 | CAD 0 |
Break-even on switching costs
The benefit of a lower rate needs to outweigh the cost of switching, including any prepayment penalty. The break-even point is the time for the estimated monthly saving to recover the one-off switching costs. Based on the inputs only.
Refinancing a Mortgage in Canada
A reference guide — what refinancing involves, the prepayment penalty, the stress test, how it compares to switching at renewal, and worked examples. Verified against FCAC, OSFI, the Bank of Canada and CMHC.
The Canadian Refinancing Landscape
Refinancing means replacing an existing mortgage with a new one — to access a different interest rate, consolidate debt, or release equity. In Canada, refinancing is generally limited to 80% of the home's value and the mortgage is uninsured. Because it is treated as a new application, the lender applies the mortgage stress test: you must qualify at the greater of your contract rate + 2% or 5.25% (OSFI).
The defining cost of refinancing mid-term in Canada is the prepayment penalty for breaking a closed mortgage. Per FCAC, this is typically three months' interest on a variable-rate mortgage, or the greater of three months' interest or the Interest Rate Differential (IRD) on a fixed-rate mortgage. The Bank of Canada's policy rate is 2.25% (held 29 April 2026) and the prime rate is 4.45%.
Common Reasons Canadians Refinance
General descriptions of why borrowers refinance. Whether it makes sense depends on the rate difference, the penalty, and individual circumstances — these are not recommendations.
Access a lower rate
If a new rate is lower than the current one, the monthly payment and total interest can fall. The saving has to outweigh any prepayment penalty — the calculator's break-even tab compares the two.
Consolidate higher-interest debt
Some borrowers refinance to roll higher-interest debt into the mortgage at a lower rate. Spreading that debt over a long amortization can increase the total interest paid over time.
Release equity
Refinancing can release built-up equity (up to 80% of home value, uninsured) for renovations or other needs. This increases the loan balance and the loan-to-value ratio.
Change product or amortization
Switching between fixed and variable, or changing the amortization, can alter payment certainty and the total interest. A longer amortization lowers payments but raises total interest.
Key Comparisons
Reference tables for the main decisions involved in a Canadian refinance.
How the prepayment penalty is calculated (FCAC)
| Mortgage type | Typical penalty |
|---|---|
| Variable-rate (closed) | Usually three months' interest on the balance |
| Fixed-rate (closed) | The greater of three months' interest or the Interest Rate Differential (IRD) |
| Open mortgage | Can usually be prepaid or broken without penalty |
| Term over 5 years, held 5+ years | Maximum penalty is three months' interest (Interest Act) |
Refinance vs switch-at-renewal vs blend-and-extend
| Factor | Refinance mid-term | Switch at renewal | Blend & extend |
|---|---|---|---|
| Prepayment penalty | Usually applies | None | Often none or reduced |
| Stress test | Applies (new application) | Not required if amount & amortization unchanged | Varies by lender |
| New rate | Current market rate | Current market rate | Blend of old and new rates |
| Best when | Saving outweighs the penalty | Term is ending soon | Staying with the same lender |
Typical refinance cost types
| Cost | What it is |
|---|---|
| Prepayment penalty | The main cost of breaking a closed mortgage mid-term (3 months' interest or IRD) |
| Discharge fee | Charged to discharge the existing mortgage; varies by province |
| Legal / registration fees | To register the new mortgage |
| Appraisal fee | To confirm the home's value where required |
Worked Examples
Illustrative scenarios. Figures are examples only, use Canada's semi-annual compounding, and do not reflect any individual's circumstances or any specific lender's rates or penalties.
Canadian Refinancing & Rate Snapshot
The rate environment and the costs that drive refinancing decisions
Bank of Canada, FCAC & OSFI · May 2026Refinancing Cost Drivers
Penalty figures are illustrative on a CAD 400,000 balance
Bank of Canada Policy Rate
Held at 2.25% since October 2025
| Factor | How it works |
|---|---|
| Stress test | A refinance is a new application; qualify at the greater of your contract rate + 2% or 5.25% (OSFI) |
| Maximum loan-to-value | Refinancing is generally limited to 80% of the home's value (uninsured) |
| Variable penalty | Usually three months' interest on the balance (FCAC) |
| Fixed penalty | The greater of three months' interest or the Interest Rate Differential, IRD (FCAC) |
| Switch at renewal | No stress test if the amount and amortization stay the same (since Nov 2024) |
| Compounding | Fixed mortgages compound semi-annually by law (Interest Act) |
Latest updates
Canadian Refinancing & Rate News & Updates
Recent changes that affect this calculator, each summarised from its announcement and linked to the source.
Bank of Canada Cuts Policy Rate by 25 Basis Points to 2.25%
The Bank of Canada (BoC) reduced its target for the overnight rate by 25 basis points to 2.25% on 29 Oct 2025, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Governing Council cited ongoing weakness in the economy and inflation expected to remain close to the 2% target.
Bank of Canada Cuts Policy Rate by 25 Basis Points to 2.5%
The Bank of Canada (BoC) reduced its target for the overnight rate by 25 basis points to 2.5% on 17 Sep 2025, with the Bank Rate at 2.75% and the deposit rate at 2.45%. Governing Council cited a weaker economy and less upside risk to inflation.
Bank of Canada Cuts Policy Rate by 25 Basis Points to 2.75%
The Bank of Canada (BoC) reduced its target for the overnight rate by 25 basis points to 2.75% on 12 Mar 2025, with the Bank Rate at 3% and the deposit rate at 2.70%. Governing Council cited inflation close to the 2% target and uncertainty created by changing US tariff threats.
See all 22 Mortgage & rates updates on Canadian Financial News & Updates
Refinancing a Mortgage — Frequently Asked Questions
Common questions about refinancing a mortgage in Canada — the basics, costs and penalties, eligibility, and special cases — verified against official FCAC, OSFI and Bank of Canada guidance.
Refinancing means replacing your existing mortgage with a new one — usually to access a different interest rate, consolidate debt, or release equity. It is different from renewing (taking a new term with your existing lender at the end of your current term) and from a straight switch (moving the same balance to a new lender at renewal). This calculator estimates the monthly payment difference and break-even point of moving to a new rate.
FCAC — Breaking your mortgage contractThis calculator uses Canada's standard convention for fixed-rate mortgages, where interest is compounded semi-annually (not in advance), as set out in the Interest Act. The payment is the level amount that pays off the balance over the amortization period at the rate entered. Both the current and new mortgages use the same method so the comparison is consistent.
Bank of Canada — Policy RateThe break-even point is the time it takes for the estimated monthly saving from a lower rate to recover the one-off switching costs, including any prepayment penalty. If you expect to keep the mortgage well beyond the break-even point, the saving has more time to add up; if you might move or change the mortgage sooner, the costs may outweigh the benefit.
FCAC — Prepayment penaltiesNot necessarily. A lower rate reduces the monthly payment and total interest, but breaking a closed mortgage usually triggers a prepayment penalty, and extending the amortization can increase the total interest paid even at a lower rate. Whether refinancing saves money depends on the rate difference, the penalty, the remaining term, and how long you keep the mortgage. The calculator helps you compare these.
FCAC — Prepayment penaltiesA prepayment penalty is a fee for breaking a closed mortgage before the term ends. Per FCAC, it is usually three months' interest on a variable-rate mortgage, or the greater of three months' interest or the Interest Rate Differential (IRD) on a fixed-rate mortgage. The IRD can be substantial, especially in a falling-rate environment, so it is important to get the exact figure.
FCAC — Prepayment penaltiesPer FCAC, federally regulated lenders (including the Big banks) must provide a way to get a specific prepayment-charge estimate, typically through a toll-free number or online estimator. The exact figure depends on your balance, rate, remaining term and the lender's own IRD method, so the calculator's switching-costs field is where you enter the quote you obtain.
FCAC — Prepayment penaltiesBesides any prepayment penalty, refinancing can involve:
- A discharge fee to release the existing mortgage (varies by province)
- Legal and registration fees to register the new mortgage
- An appraisal fee where the lender requires a valuation
Add these to the switching-costs field so the break-even reflects the full cost.
FCAC — Breaking your mortgage contractYes. Under the Interest Act, if your mortgage term is longer than five years and you have held it for at least five years, the maximum prepayment penalty is three months' interest — regardless of any larger contractual penalty. This protects borrowers who signed seven- or ten-year fixed terms. Always confirm how it applies to your contract.
FCAC — Prepayment penaltiesYes. A refinance is treated as a new application, so the lender applies the mortgage stress test. For uninsured mortgages, the minimum qualifying rate (MQR) is the greater of your contract rate + 2% or 5.25% (OSFI). You must show you could afford payments at that higher qualifying rate, even though you pay the actual contract rate.
OSFI — Minimum Qualifying RateRefinancing in Canada is generally limited to 80% of the home's value, and the mortgage is uninsured (you cannot add mortgage default insurance on a refinance). The amount you can refinance also depends on passing the stress test at the minimum qualifying rate.
OSFI — Minimum Qualifying RateSince 21 November 2024, borrowers with uninsured mortgages can switch lenders at renewal without re-passing the stress test, provided the loan amount and amortization stay the same (a straight switch). If you increase the loan amount or change the amortization — a refinance — the stress test still applies.
OSFI — Minimum Qualifying RatePer FCAC, a variable-rate mortgage typically has a penalty of three months' interest, which is usually modest. A fixed-rate mortgage uses the greater of three months' interest or the IRD, which can be much larger — sometimes several times higher. This is why breaking a fixed mortgage mid-term often has a longer break-even point than breaking a variable one.
FCAC — Prepayment penaltiesSwitching at renewal avoids the prepayment penalty entirely and, for a straight switch, also avoids re-passing the stress test. If your renewal is within a few months, waiting can be much cheaper. Refinancing mid-term makes more sense when the rate saving is large enough to outweigh the penalty before you would otherwise renew — which the break-even tab helps you check.
FCAC — Breaking your mortgage contractA blend-and-extend keeps you with your current lender and blends your existing rate with the lender's current rate over a new, longer term. It can reduce or avoid a prepayment penalty, but the blended rate may be higher than the lowest market rate available by switching. The total cost of a blended option and of a full refinance (including any penalty) can differ.
FCAC — Breaking your mortgage contractSome borrowers refinance to roll higher-interest debt into the mortgage at a lower rate, up to the 80% loan-to-value limit. This can lower the overall interest rate on that debt, but spreading it over a long amortization can increase the total interest paid over time. This calculator compares mortgage payments only and does not model debt consolidation.
FCAC — Mortgage terms and amortizationImportant Disclaimer
For educational and informational purposes only. This calculator produces estimates of the monthly payment difference, interest difference, and break-even point of refinancing a mortgage, based on the inputs provided and Canada's legally-required semi-annual compounding convention for fixed mortgages. It does not capture every product feature, prepayment privilege, fee, or change in circumstances over the life of a mortgage.
Not a complete picture of a refinance. Actual outcomes depend on the specific products and lenders involved. Breaking a closed mortgage before the term ends usually triggers a prepayment penalty — typically three months' interest on a variable-rate mortgage, or the greater of three months' interest or the Interest Rate Differential (IRD) on a fixed-rate mortgage (FCAC). Other costs can include a discharge fee (which varies by province), legal and registration fees, and an appraisal. A refinance is treated as a new application, so lenders apply the mortgage stress test — the minimum qualifying rate is the greater of the contract rate + 2% or 5.25% (OSFI). All amounts are in Canadian dollars (CAD).
No warranty of accuracy. While Money Snap takes reasonable care to source figures from official authorities (the Financial Consumer Agency of Canada, the Office of the Superintendent of Financial Institutions, and the Bank of Canada), this calculator is provided "as is" without any express or implied warranty as to accuracy, completeness, timeliness, or fitness for any particular purpose. Interest rates, fees and lending rules change frequently — figures shown may be out of date, and individual circumstances not captured by the inputs may materially affect actual outcomes.
Not financial, legal or tax advice. Information provided is general in nature only and does not take into account your personal objectives, financial situation, or needs. Results do not constitute financial, mortgage, legal, or tax advice, and use of this calculator does not create an advisory relationship. The exact prepayment penalty is set by the current lender, and the terms of any new mortgage are set out in that lender's cost-of-borrowing disclosure statement, which federally regulated lenders must provide before the agreement is signed (FCAC).
Limitation of liability. To the maximum extent permitted by law, Money Snap accepts no liability for any loss, damage, cost, or expense — direct or indirect — arising from reliance on this calculator or the information it produces. Users are responsible for verifying all figures with the relevant lender and authority before relying on them. Use of this calculator is subject to our Terms of Use.
Official data sources
Data sources: Bank of Canada — Policy Rate (2.25%, held 29 Apr 2026) · FCAC — Prepayment penalties · OSFI — Minimum Qualifying Rate. Penalty and break-even figures are illustrative models.