https://calculating.ca/calculators/real-estate/mortgage-refinance-break-even-calculator/
Real Estate / THE MITEY TOOLKIT
Refinance Cost & Break-Even
Compare interest saved with up-front refinancing costs over the same balance and repayment period.
Interest saving after entered costs
$12,805.55
From your inputs. Explore the breakdown below.
- Payment change / month
- -$215.94
- Entered up-front costs
- $6,000.00
- Interest-cost break-eveni
- 1 yr 7 mo
- New balance after comparison
- $330,544.78
- A lower payment alone does not establish a lower borrowing cost.
- Fees are paid separately in cash; added borrowing and financed fees are excluded.
FOLLOW THE CASH FLOW
Annual cash-flow totals
Balance is the period-end value; growth and payments are totals for that year or final partial year. Download the ledger for every modeled period. Figures in CAD.
| Year | Closing balance | Interest / growth | Payment / withdrawal |
|---|---|---|---|
| Now | $400,000.00 | $0.00 | $0.00 |
| 1 | $387,317.00 | $17,576.45 | $30,259.45 |
| 2 | $374,056.85 | $16,999.29 | $30,259.45 |
| 3 | $360,193.27 | $16,395.87 | $30,259.45 |
| 4 | $345,698.82 | $15,764.99 | $30,259.45 |
| 5 | $330,544.78 | $15,105.41 | $30,259.45 |
CHANGE ONE VARIABLEWhat moves your answer?
Compare five values while keeping every other input the same. These are scenarios, not likelihoods or forecasts.
| Input value | Primary result | Use scenario |
|---|
BEHIND THE ANSWER
Formula and method
Net interest benefit = interest on current schedule − interest on new schedule − up-front costs.
Both schedules have the same principal and amortization, using monthly payments and semi-annual fixed-rate conversion. The cost comparison uses interest, not total payments: principal repayment builds equity rather than being an interest expense. Break-even is the first monthly interest saving sufficient to cover entered fees.
Context sources checked October 24, 2026
These sources explain the subject. The model follows the formula and assumptions shown here; a source link does not imply endorsement.
Worked examples
One-point rate reduction with costs
- Mortgage balance:
- 400000
- Current annual fixed rate:
- 5.5
- New annual fixed rate:
- 4.5
- Remaining amortization:
- 20
- Comparison period:
- 5
- Penalty and other up-front costs:
- 6000
Interest saving after entered costs: $12,805.55
Same rate, new fees
- Mortgage balance:
- 250000
- Current annual fixed rate:
- 4.5
- New annual fixed rate:
- 4.5
- Remaining amortization:
- 15
- Comparison period:
- 3
- Penalty and other up-front costs:
- 2000
Interest saving after entered costs: -$2,000.00
Assumptions and limits
- No cash-out, extended amortization, rate changes or financed fees.
- All penalties and costs are entered by you, not estimated from a lender contract.
- Results are limited to the selected comparison period; neither schedule is an offer.
This tool provides an educational estimate. Rules, rates and personal circumstances can change the answer. Review the assumptions before relying on a result. Report a correction.
Common mistakes to avoid
- Treating an illustrative rate as a lender quote or a return forecast.
- Comparing scenarios with different time periods or leaving out relevant fees.
Frequently asked questions
Why compare interest rather than only the monthly payment?
Different portions of a payment can go to principal. Comparing interest and fees alongside the remaining balance helps separate borrowing cost from principal repayment.
Can this calculate my mortgage penalty?
No. Enter a written penalty estimate and other quoted costs. Contract-specific penalty formulas, restrictions and dates are not determined here.
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