Active Mortgage · Planning tools
BMO Bank of Montreal IRD and mortgage penalty calculator
When reviewing a BMO mortgage, separate the rate on your commitment from the rate used in a new financing offer. Your penalty comparison needs the inputs BMO assigns to your existing agreement.
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
- Original posted rate (example rate only): 6.79%
- Original discount (illustrative): 2%
- Replacement rate (example rate only): 4.04%
Locate your Annual Interest Rate and Discount from Posted
Check the BMO Mortgage Commitment and closing disclosure for Annual Interest Rate and Discount from Posted. Ask BMO to confirm the original posted rate, remaining term and comparison rate rather than reconstructing missing figures from an advertisement.
What this estimate includes
This guide uses the same agreement-mode model as the other lender pages: original posted rate minus discount, less the comparison rate, multiplied by balance and remaining months divided by twelve. A negative spread is set to zero. The estimate is compared with three months’ interest calculated from your entered contract rate.
It does not encode BMO’s product-specific terms, comparison-term selection or payout fees. The six lender pages share identical starting values and formulas, as in the reference calculator. All starting rates are example rate only.
An illustrative calculation, not a client result
With the shared example balance of $450,000, contract rate of 4.79% (example rate only) and 36 months remaining, three months’ interest is $5,389 when rounded to dollars. Original posted rate of 6.79% less a 2.00% illustrative discount gives 4.79%; against a 5.49% comparison rate (both example rate only), the spread is negative and IRD is zero. The model therefore selects $5,389. These are not current BMO rates or a quoted penalty.
Review the decision, not just the rate
A move that also changes your mortgage balance can raise different questions from a straight refinance. Ask BMO for written figures for the option you are considering, then compare the full cost with our brokers.
Questions to consider
Which BMO paperwork should I have ready?
Check the BMO Mortgage Commitment and closing disclosure for Annual Interest Rate and Discount from Posted. Ask BMO to confirm the original posted rate, remaining term and comparison rate rather than reconstructing missing figures from an advertisement.
Are the starting rates current BMO rates?
No. Every starting rate is an example rate only, shared across all six lender pages. Replace it with the relevant figure from your agreement or your lender’s dated penalty breakdown.
Does this reproduce every BMO product’s penalty?
No. This page opens the shared calculator in agreement mode. It uses original posted rate minus discount, clamps a negative spread to zero and compares IRD with three months’ interest. It does not select lender term buckets or model every product clause.
What can our brokers review with me?
A move that also changes your mortgage balance can raise different questions from a straight refinance. Ask BMO for written figures for the option you are considering, then compare the full cost with our brokers.
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.
Other lender guides and tools
Only BMO Bank of Montreal’s dated payout statement can confirm your actual penalty. 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.