Mortgage penalty calculator

What is a mortgage penalty calculator?

This tool estimates what penalty you would pay on your mortgage(s),which usually occurs if you are trying to sell a property or want to switch financing options prior to the mortgage maturing.

It’s important to confirm this penalty with your lender, since the calculation methodologies can differ slightly and the figures calculated below should only serve as an estimate. All details outlined below can be found in your mortgage commitment letter.

What is a mortgage penalty?

A mortgage penalty is a fee set by the lender that you must pay if you decide to break your mortgage. You might be thinking, why would someone want to pay more money just to get out of their mortgage? Essentially, the penalty fee will compensate the lender for the interest they would be losing out on if you decide to break your mortgage. Breaking your mortgage could potentially save you thousands of dollars, however it’s not guaranteed even with a significantly lower interest rate. This will all depend on the type and size of mortgage you have as well as the remaining time left on the term.

Why did we build this mortgage penalty calculator?

We built this mortgage penalty calculator to help you get an estimate of how much you will need to pay if you decide to break your existing mortgage before it matures. This will also allow you to know whether or not it will be beneficial to switch mortgages.

How does this mortgage penalty calculator work?

The mortgage penalty calculator will help you determine your penalty fee if you decide to break your existing mortgage. Breaking your mortgage could potentially save you thousands of dollars but it’s not always guaranteed. This calculator will give you an estimate and help you determine whether it would be beneficial to switch mortgages. Most people will break their mortgage if they are trying to sell their home or want to switch financing options. However, be sure to check with your mortgage advisor about the penalty amount once calculated, as the results are just an estimate.

How do I use the mortgage penalty calculator?

To make this calculator simple to use, we’ve filled in some of the fields already. You can modify each field with your own information to calculate your mortgage penalty amount. Try changing different fields to see how it increases or decreases your penalty amount.

Lender: Select the lender of your existing mortgage

Mortgage principal: This is the amount of money you borrow when you first take out your home loan. 

Mortgage rate: Include your current mortgage rate.

Mortgage rate type: Mortgages are either fixed or variable. You can read more about the differences between fixed mortgages and variable mortgages.

Original mortgage term: This is the length of time that the mortgage agreement at your agreed interest rate is in effect.

Maturity date: This is the date that your loan term ends. You will have the choice of paying off, refinancing or renewing your mortgage.

Payment frequency: The most common payment frequency is monthly, however you can change the frequency based on your preference of managing your household budget.

Mortgage payment: This is the amount you are charged for each payment.

Is it free to use this mortgage penalty calculator?

Yes. Our mortgage penalty calculator is completely free to use, along with all of our other calculators, rate comparison charts and articles.