Will refinancing save me money, or cost me?
Compare staying put with refinancing at a new rate. Includes your estimated prepayment penalty, fees, debt consolidation and the month you’d break even.
Will refinancing my mortgage save me money?
It depends on your penalty, your fees and how far the rate drops. As of October 2026, refinancing a $420,000 fixed-rate mortgage at 5.49% with 30 months left in the term to 4.19% over 25 years saves about $16,062 in interest over 5 years, after an estimated $5,765 penalty (three months’ interest) and $1,500 in fees, and the costs are recovered in about 18 months. It rarely pays when the rate gap is small or your lender charges a large interest rate differential (IRD) penalty.
Example uses the calculator’s starting values below, with rules as of October 2026. Change any number to see your own result.
Monthly payments drop by $437 · costs recovered in 18 months
| Now | — |
|---|---|
| After refinancing | — |
| Monthly change | — |
| 3 months’ interest | — |
|---|---|
| Interest rate differential (est.) | — |
| Prepayment penalty | — |
| Fees | — |
| Total cost to switch | — |
| Interest if you stay | — |
|---|---|
| Interest if you refinance | — |
| Break-even point | — |
| New mortgage amount | — |
| Loan-to-value (max 80%) | — |
| Still owing at end of term, if you stay | — |
| Still owing at end of term, if you refinance | — |
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Start your application (opens in a new tab) Or book a free call firstAssumptions & method
- Net savings = interest you’d pay over the comparison period if you stay (mortgage plus any debts you listed), minus interest on the new mortgage, minus the penalty and fees. Interest on any extra cash you take out counts as a cost of the refinance.
- Balance owing: savings compare interest only. If the new mortgage is larger (penalty, fees, debts or cash rolled in) or amortizes more slowly, you can owe more at the end of the term even when you pay less interest. Check the “still owing” rows.
- Penalty: at the end of your term (0 months left) there’s no penalty. Before that, variable-rate mortgages usually charge 3 months’ interest. Fixed-rate mortgages usually charge the greater of 3 months’ interest or the interest rate differential (IRD). IRD methods vary a lot between lenders, especially big banks that use posted rates, so a payout quote from your lender is always more accurate.
- Equity limit: a refinance can generally go up to 80% of your home’s appraised value.
- Debts you list are simulated at their own rate and payment until paid off. Moving unsecured debt onto your home lowers the rate but can stretch repayment over decades, and it becomes secured against your home.
- A lower payment isn’t always a saving. A longer amortization can reduce your payment while increasing total interest. Check both numbers.
- Payments use Canadian semi-annual compounding.
These calculators are for general information only and produce estimates. They are not a pre-qualification, mortgage approval or commitment to lend, and are not financial, legal or tax advice. Rules shown were checked in October 2026 and can change; lender and insurer policies vary. Confirm details for your situation before making decisions.
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