Active Mortgage · Planning tools
IRD mortgage penalty calculator
Thinking about paying out your mortgage before renewal? Compare two penalty estimates and the time it could take a lower payment to recover that cost.
Compare the two penalty estimates
All prefilled rates are example rate only, not current bank posted rates or mortgage offers. Enter the figures your lender uses for your mortgage. This is an estimate, not a payout quote.
Confirm the comparison rate for your remaining term with your lender; a rate offered on a new mortgage may not be the appropriate input.
- Three-month interest estimate
- $5,389
- Interest rate differential estimate
- $0
- Larger penalty estimate
- $5,389
The larger figure is selected by this model. Your mortgage agreement determines which penalty method applies, and other payout charges are not included.
Would the payment reduction recover the penalty?
- Monthly payment reduction
- $187 / month
- Penalty-only payback period
- 29 months
The penalty is recovered before the term ends on these inputs.
Both payment estimates use a 25-year amortization and Canadian semi-annual compounding. Payback covers the estimated penalty only, not legal fees, appraisal fees or other switching costs. It is a payment comparison, not a full interest-cost analysis.
Team Active Mortgage
Mortgage IRD and early payout estimate
October 26, 2026
Your inputs
- Mortgage balance: $450,000
- Contract rate (example rate only): 4.79%
- Term remaining: 36 months
- Comparison rate (example rate only): 5.49%
- Lender category: Bank
- Replacement rate (example rate only): 4.04%
Understand the numbers before making a change
Interest rate differential, or IRD, compares a rate from your existing mortgage with a lender-selected comparison rate over the time left in your term. Three months’ interest is a separate estimate based on your outstanding balance and contract rate. A closed fixed mortgage may use the larger amount; your agreement governs the actual calculation.
In contract-rate mode, this calculator uses your entered contract rate for the spread. In original-agreement mode, it uses original posted rate minus discount. In either case, a negative spread becomes zero. The reference model uses your exact entered months; it does not choose a bank’s comparison-term bucket.
Bring your agreement and a dated payout breakdown
Ask your lender for the balance, applicable rate inputs, remaining term and penalty for your intended payout date. Our brokers can help you compare a switch with staying put, and consider available prepayment, portability or blending options without assuming they will eliminate a charge.
Questions to consider
Is this the amount my lender will charge?
No. This is a planning estimate using the values you enter. Your lender’s dated payout statement determines the penalty and any additional discharge costs.
Which rate should I enter for comparison?
Ask your lender which comparison rate and remaining-term category apply to your mortgage. A new mortgage offer is not necessarily the rate used in a penalty calculation.
What changes when I use my original agreement?
The agreement mode subtracts your original discount from your original posted rate before comparing rates. The three-month interest estimate still uses your entered contract rate. Both modes retain the same remaining-month calculation.
Does this apply to every mortgage product?
No. Open, variable, fixed and combined mortgage products can have different prepayment terms. Read your agreement and ask your lender which method applies; the larger estimate shown here is not a universal product rule.
Does the payback calculation include switching costs?
No. It divides the estimated penalty by the monthly payment reduction using a 25-year amortization for both payments. Legal, appraisal and discharge costs, changes in amortization and other terms need a separate review.
What should I discuss before paying out early?
Our brokers can help you compare a refinance with waiting, using available prepayment privileges or asking your lender about portability and blending. Eligibility and costs depend on your agreement and circumstances.
Find the paperwork for your lender
Each lender guide opens the same calculator in original-agreement mode. Starting figures are illustrative, not lender-specific live rates.
TD Bank
Find your Net Rate inputs.
View lender guide →RBC Royal Bank
Find your Disclosure Statement posted rate inputs.
View lender guide →Scotiabank
Find your Posted Rate and Discount inputs.
View lender guide →BMO Bank of Montreal
Find your Annual Interest Rate and Discount from Posted inputs.
View lender guide →CIBC
Find your Posted Rate and Rate Reduction inputs.
View lender guide →National Bank of Canada
Find your Taux affiché / Posted Rate inputs.
View lender guide →Keep comparing your options
The existing mortgage penalty calculator offers a shorter contract-rate comparison. This tool adds original posted-rate and discount inputs plus a penalty-only payback estimate. Neither replaces your lender’s payout statement. OAC.
Talk through your next step with our brokers
Your lender’s terms, household budget and goals matter alongside the numbers. Our team can help you review your mortgage options.