Mortgage Prepayment Penalty Calculator: Estimate Your Costs

Several factors influence your mortgage penalty, including the remaining term, interest rate, and the specific calculation method used by your lender. For fixed-rate mortgages, the penalty is often the greater of three months' interest or the Interest Rate Differential (IRD). Variable rate mortgages typically have a penalty of three months' interest. Use our mortgage refinance penalty calculator to analyze different scenarios and understand whether an early payoff is financially beneficial.

Canadian Mortgage Penalty Calculation Guide

It's important to recognize that while a mortgage prepayment penalty calculator offers a useful estimate, it has limitations. The final penalty calculation rests with the lender, and their specific methods and data may vary. Consider these factors:

Accuracy of Inputs Ensure all information entered into the calculator, such as interest rate, remaining term, and mortgage type, is accurate. Even small discrepancies can affect the estimated penalty.

Lender-Specific Calculations Different lenders, such as CIBC, BMO, Scotiabank, and TD, may use slightly different formulas or include additional fees. Always confirm the calculation method with your lender to get the most precise figure.

IRD Fluctuations for fixed-rate mortgages, the Interest Rate Differential (IRD) can change. The calculator provides an estimate based on current rates, but the actual IRD at the time of prepayment will determine the final penalty. 

Additional Fees Some lenders may include administrative or discharge fees in the mortgage payout. These are not typically included in standard penalty calculations but can add to the overall cost. Always consult directly with your mortgage provider for an accurate penalty quote before making any decisions about prepaying or refinancing your mortgage.