Mortgage Refinance Calculator (Canada)
See whether refinancing is actually worth it — not just whether the new rate looks lower. This calculator estimates your new payment, monthly savings, refinance costs, break-even point, and the longer-term trade-off between cash-flow relief and total interest.
Built for real refinance decisions across Canada: useful before calling a lender, broker, or starting a formal application.
Typical refinance question
“Will I recover the cost?”
That is the first real filter. If the break-even period is too long for your plans, a lower rate alone may not save the decision.
What this estimate is best for
Decision-making
Use it to compare staying put versus refinancing, then pressure-test whether the payment change and cost recovery still make sense in your timeline.
Quick reality check
- If your break-even is longer than your expected timeline, refinancing is often not worth it.
- A lower payment alone is not a win if total interest increases.
- The penalty and upfront costs are usually the deciding factor.
Inputs
Current mortgage
Refinance scenario
Decision context
Results
Decision engine
This refinance deserves serious attention
The refinance appears recoverable inside your expected timeline, which makes this scenario worth taking seriously.
Payment relief
$0
This is the cash-flow effect on your chosen payment frequency.
Current payment
$0
Using your current balance, rate, and remaining amortization.
Refinanced payment
$0
Includes the new rate, new amortization, and any cash-out amount.
The real question is whether you recover the cost fast enough — and whether the lower payment came from a cleaner rate or mostly from a longer amortization.
This result needs context before you can call it a good refinance.
Current vs refinanced payment
See whether the refinance produces real payment relief, or only a modest change once everything is compared on the same payment frequency.
Cost recovery over time
This chart shows how payment savings accumulate versus the upfront cost of refinancing. The crossing point is the practical break-even moment.
Detailed breakdown
What is actually making this refinance look good or bad
This table is where the decision becomes honest. It separates payment relief, upfront cost, cost recovery, and the effect of any longer amortization so you can see whether the refinance is genuinely helping or just looking cleaner on the surface.
| What this is | Amount | Why it matters |
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How to use
Start with the numbers you already know or can estimate fairly confidently: your remaining balance, your current mortgage rate, how many years are left on the amortization, and the cost of breaking or refinancing the mortgage. Then enter the new refinance rate you think is realistic today — not the best marketing number you saw in a headline.
This calculator works best when you are trying to answer a real decision question, such as: “Should I refinance now?”, “Will this lower rate recover the penalty quickly enough?”, or “Is the payment drop real savings or just an amortization reset?” That is the lens to use when reading the result.
- Enter the current mortgage balance and current rate.
- Use the remaining amortization on your existing schedule.
- Enter the new refinance rate and the new amortization you are considering.
- Add refinance costs and any mortgage penalty if you would be breaking early.
- Set how long you realistically expect to keep the refinanced mortgage.
- Use the result to judge break-even first, then payment relief, then the long-term trade-off.
If you want to compare the refinance against other mortgage payment structures, the Mortgage Payment Calculator (Canada), Mortgage Renewal Calculator (Canada), and Extra Mortgage Payments & Lump Sum Calculator (Canada) are the best related next steps.
What your result actually means
A refinance result is not just about whether the payment is lower. That is the most common trap in refinance decisions. A lower payment can come from a genuinely better deal — or from quietly stretching the mortgage back out over more years, which reduces the payment but increases how long the debt stays with you.
That is why the break-even result matters so much. If the combined cost of the refinance and penalty takes too long to recover, the refinance may be mathematically “better” in theory but practically weak for your real timeline. If you think you may sell, move, or refinance again before break-even, the savings are often not truly yours.
On the other hand, if the refinance gives meaningful payment relief, recovers its cost quickly, and still keeps the amortization in a reasonable place, that is usually a strong sign. In that case, the refinance is not just cosmetically better — it is actually working for your cash flow and your mortgage path.
A good refinance usually has a realistic break-even period, a payment change that actually matters, and a structure that does not create “fake savings” by pushing the debt out too far.
How the calculation works
The calculator compares two mortgage paths using the same remaining balance as the starting point. The first path is your current mortgage: current balance, current rate, and the remaining amortization you have today. The second path is the refinance scenario: the refinanced balance, the new rate, and the new amortization you are considering after the refinance.
The refinanced balance includes any cash-out amount you add. The refinance cost side combines the refinance costs and mortgage penalty, because in real life those are both part of the hurdle the refinance needs to recover.
Monthly payments are calculated using standard amortizing-loan math. Then the calculator estimates the payment difference between the current mortgage and the refinance on the same payment frequency. From there, it calculates break-even by dividing the total upfront cost by the monthly savings. If the refinance does not produce savings, break-even effectively does not happen.
The hold-period comparison then asks a more practical question: over the number of years you expect to keep the refinanced mortgage, how much savings actually accumulate after paying the refinance cost? This is often a better decision lens than only looking at “new payment versus old payment.”
Suppose you owe $420,000, your current rate is 5.89%, and you have 22 years left. You are offered 4.79% with a new 25-year amortization, but you would pay $3,500 in refinance costs plus a $6,200 penalty. The refinance may lower the payment right away, but if those costs take too long to recover — or if the lower payment mostly comes from stretching the amortization — the decision may be weaker than it looks.
How to make a decision
1. Look at break-even before you get excited about the lower rate
If the refinance takes too long to recover its cost, the lower payment may not matter much in your real life. A refinance can look “smart” on paper but still be the wrong move for your timeline.
2. Separate true savings from amortization-driven payment relief
A lower payment caused mainly by restarting a longer amortization is not the same as a lower payment caused by a meaningfully better rate. Both can help cash flow, but they are different decisions.
3. Be brutally honest about how long you will keep the mortgage
This is where many refinance calculations fall apart. If you are uncertain about moving, upgrading, downsizing, or refinancing again, you need a shorter and stronger break-even — not a weak one that only works if everything goes perfectly.
4. Use one primary question
Ask this: “If I ignore the headline rate and only look at my timeline, costs, and payment structure, does this refinance still look worth doing?” That question cuts through a lot of lender marketing noise very fast.
Real scenarios
Common mistakes
1. Looking only at the new rate
A refinance is not won by the rate alone. Costs, penalties, and amortization structure can wipe out a lot of what looked attractive at first glance.
2. Ignoring break-even completely
If you never recover the refinance cost inside your actual timeline, the decision is weaker than the lower payment suggests.
3. Confusing lower payment with lower total cost
A lower payment may simply mean the mortgage was stretched longer. That can still be the right move for cash flow — but it is not the same thing as a clean cost improvement.
4. Underestimating the penalty
In Canada, the break fee can materially change the economics. A refinance that looks great without the penalty can look average or poor once it is included.
5. Pretending the hold period is “probably long enough”
Refinance decisions deserve realistic timing. Optimism about how long you will keep the mortgage often leads to overstating the value of the refinance.
Frequently asked questions
Usually when the rate improvement is meaningful, the refinance costs and penalty can be recovered in a reasonable time, and the new structure still fits your broader mortgage goals instead of only making the payment look lower.
No. A lower payment can come from a better rate, which is good, or from extending the amortization, which changes the interpretation. A lower payment is only one piece of the decision.
Because refinance costs and penalties are real money paid upfront. If you do not recover them before you sell, move, or change the mortgage again, the refinance often underdelivers.
Yes. Extending amortization usually lowers the payment, which can make the refinance look stronger in the short term even if the long-term cost story is less impressive.
Yes. A cash-out refinance is partly a refinance decision and partly a new borrowing decision. If you ignore the extra borrowed amount, the refinance can look artificially cleaner than it really is.