Example$28,000 vehicle loan · 7.99% → 5.49% refi · 48 months remaining · Ontario
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The Canadian refinance calculator shows whether breaking your mortgage (or auto loan) for a lower rate actually saves money once the penalty, discharge fees, and legal costs are included. Enter your current balance, rate, remaining term, and the new rate - the tool computes your break-even month and cumulative lifetime savings.
The calculator computes monthly payments on both your current and new loan, subtracts the total cost of refinancing (penalty + fees), and finds the month where cumulative savings turn positive. If your break-even is after your planned sale or renewal, refinancing loses money. IRD is estimated using the posted rate differential method most banks apply; your actual penalty may differ - request a payout statement.
IRD penalties from the big banks are typically 2–4× the 3-month interest penalty - sometimes $15,000–$30,000 on a mid-cycle break. Monoline lenders (MCAP, First National) usually use a smaller differential.
Refinancing usually makes sense when current rates are at least 0.5–1% lower than your existing rate, the penalty is manageable, and you plan to stay in the home long enough to pass the break-even point. Use the calculator to model total cost of refinancing vs interest saved over your remaining term.
Common fees include a mortgage prepayment penalty (the greater of 3-months interest or the Interest Rate Differential), an appraisal fee ($300–$500), legal or discharge fees ($500–$1,500), and potentially CMHC insurance if you're increasing the loan-to-value above 80% or switching from uninsured to insured.
IRD is how the big banks calculate penalties when you break a fixed-rate mortgage mid-term. It's the difference between your contract rate and the posted rate for a term matching your remaining months, multiplied by your balance and remaining months. IRD penalties from big banks are typically 2–4× the 3-months-interest penalty and can reach $15,000–$30,000.
Yes. If rates have dropped or your credit score has improved since the original loan, refinancing an auto loan can lower your rate and monthly payment. There's usually no prepayment penalty on personal auto loans, but verify with your current lender - some captive finance companies charge fees.
Long-form explainers that pair with this calculator.