Prepayment penalty calculator
All fields start empty. The estimate updates as you type.
Open term: FCAC explains that an open mortgage can be broken without a prepayment penalty. Other fees can still apply.
For a variable rate the penalty is typically three months of interest. FCAC does not describe variable terms separately, so check the prepayment section of your contract.
The result is a calculation on your figures. It is not a guaranteed saving or an offer.
The lower figure uses your comparison rate as entered. The higher one also applies the discount method, if you entered a posted rate. Your contract decides which method applies.
Interest at your contract rate on the amount you entered, for three months. A simple approximation.
Your rate minus the comparison rate, applied to the amount for the time left in the term. Zero when the comparison rate is equal to or above your rate.
Add the comparison rate to see the IRD.
Your discount is the posted rate when you signed minus your contract rate. The comparison rate is lowered by that discount, which widens the gap.
FCAC says lenders usually use the IRD when your rate is above the current rate and you signed less than five years ago, which matches the dates you entered.
Interest Act, section 10: your term runs longer than five years and that period has passed since the mortgage date. The section allows payment with three months further interest in lieu of notice. It does not apply to corporate borrowers.
How the estimate changes as the term runs down
Same amount and rates as you entered, at six months and twelve months from now, with less time left. A scenario, not a forecast: rates and your balance will move.
Payback scenario at the rate you entered to test
At the test rate the monthly payment is not lower, so the difference never covers the cost.
Enter a test rate and the amortization left to see this scenario.
Both payments use the amount and the amortization you entered, with a fixed rate stated half-yearly, not in advance. This is a what-if on your own numbers, not an offer, and it does not tell you whether to break.
Basis: your own figures and the simplified methods FCAC describes. The rate and costs you can actually get may differ.
This calculation is not a loan offer or a personal recommendation about breaking your mortgage.
For illustration only. Not a mortgage offer or a commitment to lend. Cindrus is not a lender or a mortgage brokerage, does not deal in mortgages and passes no information to lenders or brokers.
- Three months' interest is simple interest on the amount at your contract rate.
- The IRD is the rate gap times the amount times the time left, without discounting. A lender that discounts the remaining payments arrives at a smaller figure, so this is an upper estimate.
- The penalty is the larger of the two methods, the general case FCAC describes.
- No prepayment privilege is deducted unless you entered a smaller amount.
- The payback scenario uses a monthly payment with interest compounded half-yearly, not in advance.
Your next step.
Take the result with you.
Free. No account.
- Write down the figures you used: you find them under «Understand the number».
- Ask what it costs in total, not only what the payment will be.
- Ask whether the rate is fixed and what can change it.
- Ask for the offer in writing, so you can compare it calmly.
- Ask what is not included in the figure.
Ready to talk to the bank?
Your figures and the right questions, on one page.
- Costs and rate
- Fees and remaining balance
- The assumptions behind the figure
Follow your loan.
Your loan and your calculations, in one place.
- Your calculations saved in one place
- Your financial overview
The account is free.
The calculator is free without an account. Not personal advice.
Your bank conversation
Ask the bank about these six things.
Based on your calculation. Not personal advice.
How the penalty estimate is worked out
FCAC describes a prepayment penalty on a closed term as usually the higher of three months of interest on what you owe and the interest rate differential. The calculator works out both from your figures and shows the larger.
For the differential it takes your contract rate minus the comparison rate and applies that gap to the amount for the time left. Lenders work out the interest left at both rates, so their figure can be lower than this simple version.
FCAC lists two ways of setting the second rate: the current posted rate for a similar term, or that rate minus the discount you were first given. If you enter the posted rate from your contract, the calculator shows the second way as well.
The Interest Act check uses the start date and term length you enter. Lenders under federal rules have to disclose the components of any formula behind a prepayment charge, so your contract is the place to confirm the method.
- Interest Act, R.S.C. 1985, c. I-15, ss. 6 and 10 (laws-lois.justice.gc.ca, read October 19, 2026)
- FCAC: Mortgage prepayment penalties (canada.ca, page details 2025-10-15, read October 19, 2026)
- FCAC: Breaking your mortgage contract (canada.ca, read October 19, 2026)
- Financial Consumer Protection Framework Regulations, SOR/2021-181, s. 40(1)(l) (laws-lois.justice.gc.ca, read October 19, 2026)