Will refinancing actually save me money?
The honest math: net of penalty, net of fees, with a real break-even. We only recommend a refinance when the math wins.
Your inputs
Lifetime cost of the new mortgage
Total interest vs. principal over the full 25-year amortization at 4.39%
Lender-ready summary, your assumptions baked in, and a personalized note from an advisor at Mortgage Squad Advisors.
Break-even is the whole game
Refinancing mid-term in Canada almost always means paying a prepayment penalty to break your existing contract. On a fixed mortgage that penalty is the greater of three months’ interest or the Interest Rate Differential (IRD) — and at a Big-6 bank, posted-rate IRD can run into five figures. The refinance only makes sense when the interest you save over the remaining term clearly exceeds that penalty plus legal, appraisal and discharge fees.
The honest break-even test
We divide your total switching cost (penalty + fees) by your monthly interest savings to get a break-even in months. If you’ll stay in the home past that point — and past your remaining term — the math wins. If break-even lands beyond your remaining term, you’re usually better off waiting until renewal, when switching lenders carries no penalty at all.
One trap worth watching: re-amortizing back to 25 or 30 years lowers your payment but can add tens of thousands in lifetime interest, as the donut above makes plain. A blend-and-extend with your current lender, or keeping your existing remaining amortization on the new mortgage, can capture the rate savings without resetting the clock.
Payment frequency — pay less interest
Accelerated schedules slip in one extra monthly payment a year — shrinking interest and your timeline.
Amortization schedule
How your balance falls — and how the interest/principal split shifts — over 25 years.
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | $10,393 | $19,776 | $448,907 |
| 2 | $10,855 | $19,314 | $438,052 |
| 3 | $11,336 | $18,833 | $426,716 |
| 4 | $11,840 | $18,330 | $414,876 |
| 5 | $12,365 | $17,804 | $402,511 |
| 6 | $12,914 | $17,255 | $389,597 |
| 7 | $13,487 | $16,682 | $376,110 |
| 8 | $14,086 | $16,084 | $362,025 |
| 9 | $14,711 | $15,458 | $347,314 |
| 10 | $15,364 | $14,806 | $331,951 |