Mortgage Refinancing in Canada — How It Works

Here's how refinancing really works — the break-even, the penalty, and how much equity you can unlock — with a calculator that gives you a straight answer before you decide.

Each one is really a trade — new terms in exchange for a penalty and a fresh approval. The calculator below tells you whether the trade pays.

Breaking your mortgage costs a penalty. Refinancing wins only if your monthly savings pay that back before you'd renew anyway. Illustrative estimate — not an offer, and your lender's exact penalty will differ.

variable → ~3-months' interest penalty · fixed → usually the larger IRD penalty

or waiting for renewal may also beat breaking now — let's look at the full picture.

When you break even — cumulative savings vs. the up-front cost

A refinance can take your mortgage up to

Full savings & total-cost analysis, side by side.

, so it sits in a higher pricing tier — lenders publish a different rate for each situation:

Your tier is the starting point, not the final number.

(which we can fund, and which moves with a lender's commission, volume bonus, or a current promotion). As a rule of thumb we assume about

off the posted sheet rate for this — already reflected in the estimate above. That's the part a rate table can't show — and where a good broker earns their keep.

Almost always just three months of interest on your balance — usually small, which is why refinancing a variable mortgage is far more likely to pay.

The Interest Rate Differential can be thousands — the bigger the gap between your rate and today's, and the more term left, the larger it grows. It often outweighs a modest rate drop.

Don't guess the penalty — and don't break blindly.

(blending today's rate into your existing one, no penalty) beats breaking outright — we'll compare both.

Tell us your numbers and a licensed RateStreet advisor will pin down your real penalty, compare breaking vs. blending, and shop the lenders — so you only refinance when it truly pays.

This page and calculator are provided by RateStreet for

Refinancing can lower your rate or unlock equity — but the penalty decides whether it pays. See your break-even, penalty estimate, monthly savings, and how much equity you can access with RateStreet's free refinance calculator.

Rates dropped since you signed — refinancing can cut your payment and total interest.

Access up to 80% of your home's value in cash for renovations, investing, or a big purchase.

20%+ down, or a switch/transfer with no new funds, or ≤65% LTV — near-best rates.

Your penalty, break-even, and the blend-vs-break comparison — the honest numbers.

We match you to the lender and product that win on total cost, not just the headline rate.