Mortgage Penalty Calculator

For fixed-rate mortgages, the penalty is the greater of: (1) three months interest on your current balance, or (2) the Interest Rate Differential (IRD) for the remaining term. Variable-rate mortgages typically only charge 3 months interest.

The Interest Rate Differential compares your existing mortgage rate to what the lender can currently charge for a similar term. The difference is applied to your balance for the remaining months of your term.

When the interest savings from a lower rate over the remaining term exceed the penalty cost. This calculator helps you estimate the penalty to make that comparison.