Mortgage Penalty Calculator Canada 2025

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Fixed & variable rate mortgages • 3-month interest & IRD • Big bank vs monoline

Breaking your mortgage early can trigger a prepayment penalty. For variable-rate mortgages, it's typically 3 months' interest. For fixed-rate mortgages, it's the greater of 3 months' interest or the Interest Rate Differential (IRD).

Mortgage Penalty Estimator

When Does a Mortgage Penalty Apply?

How the IRD Penalty Works

The Interest Rate Differential (IRD) compensates the lender for the interest they lose when you break your mortgage. It equals the difference between your contract rate and the lender's current rate for the remaining term, multiplied by your balance and time remaining.

Big bank IRD calculations are notorious for being higher because they compare your discounted rate to the posted rate — not the actual current market rate.

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