Refinancing your Canadian
mortgage — net-of-penalty
guide.
How to decide if refinancing makes sense, compute the prepayment penalty correctly (Big-6 vs monoline IRD), and access up to 80% LTV equity — with the break-even math your bank won't volunteer.
Four things this guide
teaches you to do.
The deciding number is always your saving net of the penalty and costs. We run this math first, every time.
Penalty-first thinking
The right question is never 'is my new rate lower?' — it's whether your net-of-penalty savings are positive and how fast you break even. We compute the exact IRD before suggesting anything.
Up to 80% LTV equity
A prime A-lender refinance unlocks up to 80% of your home's appraised value. Renovation, investment down payment, education — fully modelled with no surprises at the lawyer's office.
Consolidate high-interest debt
Moving $30K in credit card debt from 21% into a mortgage at an assumed 4.59% saves roughly $5,000/year in interest. We model annual savings and the amortization tradeoff on every file.
Know your break-even date
Break-even = (penalty + closing costs) ÷ monthly savings. Under 24 months? A refinance deserves serious consideration. Over 36 months? Waiting for renewal is usually better — and we'll say so.
How a refinance
actually works.
Penalty first, savings second, decision last.
That order matters.
30-minute intake call
Share your lender, balance, rate, and maturity date. We pull your exact prepayment penalty — IRD or 3 months' interest, using your lender's own formula — and run the full net-of-penalty math before suggesting anything.
Lender selection and approval
If the math works, we present 2–3 best-fit lenders with rate, conditions, and fees in writing. Application, credit pull, and appraisal follow. Written commitment typically arrives within 7–14 days.
Legal, funding, and payoff
Your lawyer registers the new mortgage and discharges the old one. High-interest debts settle at closing if consolidating. Excess equity wires to you. Most A-lender files close in 21–35 days from intake.
Six situations where
this guide applies.
Tap any situation below to see how we approach it.
If you’re…Your rate is 0.50%+ above market with 24+ months left
Your rate is 0.50%+ above market with 24+ months left
Monthly savings often cover the penalty inside 24 months. We show you the exact break-even — before you commit a dollar. Waiting for renewal is the honest recommendation when the math doesn't clear.
Run my numbersIf you’re…You carry $20,000+ in credit cards or lines of credit
You carry $20,000+ in credit cards or lines of credit
Rolling high-interest debt into your mortgage at today's rates can save thousands annually and dramatically improve monthly cash flow. We build the card-closure step into the closing checklist.
See my savingsIf you’re…You need cash for a renovation or investment property
You need cash for a renovation or investment property
Access up to 80% of your home's appraised value through an A-lender refinance — no private mortgage premiums or second mortgage fees when you stay inside the LTV cap.
Check my equityIf you’re…You have CRA debt that needs clearing before a lien
You have CRA debt that needs clearing before a lien
CRA debt can typically be rolled into a refinance at most A-lenders if no lien is registered yet. B-lenders can help if a lien exists. Acting early keeps more options open.
Explore CRA optionsIf you’re…You have bruised credit or irregular income
You have bruised credit or irregular income
B-tier and private lenders can often help — consolidating debt and beginning to reset your credit profile at the same time. We plan the 12–24 month exit to A-lender pricing at intake.
Explore my optionsIf you’re…You want equity without breaking your existing rate
You want equity without breaking your existing rate
A blend-and-extend, HELOC, or second mortgage may be better than a full refinance. We compare all paths side by side with every fee disclosed before you commit.
Compare my optionsBig-6 vs monoline —
same file, different penalty.
On a $500K illustrative file, the lender type can make a $7,000+ difference in what you pay to break your mortgage.
| Lender type | Penalty formula | On $500K @ 5.49%, 3yr left |
|---|---|---|
| Many monolines | 3-mo OR contract-rate IRD | ~$6,862 |
| B-lenders | Often 3-mo only | ~$6,862 |
| Big-6 banks | 3-mo OR posted-rate IRD | ~$14,100 |
Illustrative only — assumes 5.49% contract rate, 3yr remaining, 5.19% monoline current rate, 6.05% posted rate, 1.50% original discount. Get your exact penalty in writing from your lender before deciding. Use the penalty calculator.
Common questions,
clear answers.
IRD math, equity limits, break-even timelines, fees — answered plainly.
When does refinancing a Canadian mortgage actually make sense?
How are mortgage prepayment penalties calculated in Canada?
What is IRD and why does Big-6 IRD penalize so much more?
How much equity can I access through a refinance?
Can I refinance to consolidate credit card and CRA debt?
Will refinancing extend my amortization?
What's the difference between a refinance and a HELOC?
Do you charge a fee for refinancing?
How long does a refinance take to close?
Can I refinance with bad credit or recent CRA debt?
We’ll try to beat your rate.
If we can’t, we pay you $500.¹
¹ Rate Beat: eligible Big-6 bank written offers only · same product, term & amount · $500 paid to you or your nominated charity at closing · conditions apply
Find a specialist in your city
IRD penalty math is the same everywhere in Canada, but the lender mix, property values, and break-even timelines vary by market. Our advisors know the local dynamics in every city we serve.