Estimates only, for mortgage professionals. Lenders set their own rates, fees, LTV limits and conditions, so confirm the terms with the lenders you're quoting, and get a written payout statement for the current mortgage. Appraisals, underwriting and legal costs can change the final numbers. This calculator is provided free by Neighbourhood Holdings. It does not replace the cost of borrowing disclosure the borrower must receive before signing, and it isn't a suitability assessment or a lending approval.
How the numbers are calculated
Same cash in both options. Each option is sized so the client receives the cash entered after costs. All stated costs are added to the new mortgage on closing, and percentage fees are calculated on each option's gross new mortgage, including the financed costs. Tax, discharge fees, title and registration costs, future renewal costs, insurance premiums and qualifying tests aren't included unless you add them to other costs. If the client pays costs in cash at closing instead, payments will differ and should be modelled separately.
Payments. Principal-and-interest payments use Canadian fixed-rate semi-annual compounding, converted to an effective monthly rate. Interest-only second mortgage payments use the quoted annual rate divided by 12, so confirm the lender's accrual convention and payment schedule. The current first uses its calculated payment unless you enter the actual payment. For a variable or fixed-payment variable mortgage, enter the actual payment and check its current rate.
Period compared. Rates are held constant only until the earliest of the current first's renewal, the second's term and 60 months. Monthly modelling is an estimate, and lender statements can vary with payment dates, rate changes and rounding.
Penalty. A blank penalty uses three months' interest as an illustration only. A fixed mortgage's interest rate differential can be much higher. The Financial Consumer Agency of Canada explains how prepayment penalties work.
Rate impact compares the interest on the existing balance at the new refinance rate with the interest at its current rate over the same remaining amortization. It helps explain the result and isn't added to total cost. Blended rate is a balance-weighted snapshot, not an APR.
Matching refinance rates vary only the new first mortgage rate, holding its gross amount, fees, penalty and amortization constant. The total-cost rate makes interest plus one-time costs equal over the period shown. The monthly-payment rate makes the new payment equal to the current first plus second payments. Rates are solved between 0% and 50%, and neither is a quote or a qualification result. A longer amortization can lower payments while slowing principal repayment.
