Mortgage Refinance Calculator

What the Mortgage Refinance Calculator does

Refinancing lets you access equity, consolidate debt or change lenders, but it also means breaking your current mortgage, resetting your amortization and taking on uninsured underwriting rules — three things a payment comparison alone will not show you. This calculator puts the whole picture in one place: what you can access, what it costs, what it saves, and whether the numbers actually work in your favour.

It is deliberately built to include the comparison most refinance calculators skip. Refinancing at a lower rate over a fresh amortization very often raises your total lifetime interest even though your monthly payment falls, and that trade-off is shown here explicitly rather than hidden behind a smaller payment figure.

• Your maximum refinance amount and available equity at 80% loan-to-value
• Your new payment and the itemised total cost to refinance
• Interest saved over your remaining term, and the break-even point in months
• The honest lifetime interest comparison — old mortgage vs new, including the amortization-reset effect
• What refinancing does to your default insurance and your loan-to-value ceiling going forward

The key variables that move the answer — and how lenders treat them

Refinancing decisions come down to a handful of numbers, and lenders treat each of them very differently from how a borrower usually thinks about them.

• 80% loan-to-value ceiling — this is not negotiable. Refinancing is uninsured lending by definition, so no lender can take you above 80% of your home's value regardless of income, credit or how the funds will be used, aside from a narrow secondary-suite program introduced in 2025.
• Amortization reset — resetting the clock to a fresh 25 or 30 years is the mechanism that most commonly makes a lower-rate refinance cost more over its lifetime than doing nothing. Lenders will happily offer the longer amortization because it lowers the payment and improves your debt service ratios; it does not lower what you ultimately pay.
• Penalty — if you are mid-term, this is usually the largest single cost of refinancing and it varies enormously by lender type and rate type. Get the exact figure from the penalty calculator rather than a rule of thumb before deciding.
• Purpose of the funds — lenders price and underwrite a straight rate-and-term refinance differently from a cash-out refinance for debt consolidation or investment, and the latter typically faces closer scrutiny of the use of funds even though the loan-to-value math is identical.

How refinancing is actually calculated in Canada

Your maximum refinance amount is 80% of your home's current value, and the equity available to access is that ceiling minus your existing mortgage balance and any other secured debt. Your new mortgage is the current balance plus any cash-out plus the penalty and other costs, if you choose to capitalize them rather than pay in cash.

The new payment uses the same Canadian semi-annual compounding formula as every mortgage on this site, solved against the new mortgage amount over the new amortization you select. Interest saved over your remaining term compares the interest you would have paid on your current mortgage against the interest on the new one, over the same number of months — the correct like-for-like window, since your current term would have ended at that point regardless.

The lifetime comparison is different and more revealing: it takes each mortgage to its own full payoff — the old one over what was left of its original amortization, the new one over its full new amortization — and compares total interest across both complete lifespans. This is where the amortization-reset effect shows up, and it is the number that most refinance calculators do not show.

• Maximum refinance: home value × 80%
• Equity available: (home value × 80%) − current balance
• New mortgage: current balance + cash-out + capitalized penalty and fees
• Lifetime interest: payment × total number of payments − principal, calculated separately for old and new

What you get from this calculator, and how a lender uses these numbers

A refinance application is underwritten on the new mortgage as if it were brand new — full re-qualification, current stress test, current debt service ratios — because that is exactly what it is. Understanding the figures below is what lets you walk into that process knowing what you are asking a lender to approve.

• Maximum refinance amount — the hard ceiling every lender will apply, useful to know before you set expectations on the funds you need
• Total cost to refinance — the number a lender will ask about if these costs are being capitalized rather than paid separately
• Break-even point — tells you whether the numbers work if you plan to keep this mortgage for a while, or if refinancing is really being driven by a need for funds rather than a rate saving
• Lifetime interest comparison — the number to weigh against the monthly relief before deciding an amortization reset is worth it

Using your results well

If the funds are genuinely needed — debt consolidation, a renovation, an investment — the lifetime interest comparison is context, not necessarily a dealbreaker; a higher lifetime interest figure can still be the right decision if the alternative is unsecured debt at a much higher rate. If the refinance is purely about chasing a lower rate with no cash-out, the break-even point and lifetime comparison should be doing most of the deciding.

This calculator does not model the alternative of renewing with your existing lender and separately taking a HELOC or second mortgage for any additional funds needed — that comparison, which is very often the better answer when cash-out is the only reason to refinance, is built out fully on the refinance-versus-renew calculator.

• Get an exact penalty figure from the penalty calculator before relying on an estimate here
• Compare against renew-plus-HELOC on the refinance-versus-renew calculator before committing
• Weigh the lifetime interest change against the monthly relief deliberately, not automatically
• Confirm your new loan-to-value stays at or under 80% once costs are capitalized

Related calculators