IRD penalty calculator
Compare three-month interest, contract-rate IRD, and posted-rate IRD before you break a mortgage.
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Interactive calculator
IRD penalty calculator
Derive the payout penalty by comparing three-month interest with posted-rate and contract-rate IRD scenarios.
How this calculator works
Compare three-month interest, contract-rate IRD, and posted-rate IRD before breaking a mortgage.
Use it before refinancing, selling, porting, or accepting a low-rate product with a harsh exit formula.
Inputs you will need
- Mortgage balance and current contract rate
- Months remaining in the term
- Posted-rate discount and current comparison rates
Assumptions and limitations
- Fixed mortgages often charge the greater of three months' interest or IRD.
- Posted-rate IRD can preserve the original discount and create a larger spread.
- Contract-rate IRD typically compares the actual contract rate to a similar remaining-term rate.
- Confirm with your lender before making decisions.
Example scenarios
Posted-rate IRD shock
See how an original posted-rate discount can make a break penalty much higher.
Contract-rate IRD comparison
Compare a fairer contract-rate formula against three months' interest.
Related tools
Turn this savings math into a refinancing decision
Use the break-even, penalty, or renewal output alongside the refinance and renewal playbooks so you compare timing, costs, and fallback options before you switch.
Guides
Read the Canada-specific playbook before you commit to the next step.
Execution
Use the broker workflow, rates pages, or secure dashboard to move from estimate to action.
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Create a free account to save scenarios, compare options side by side, and share results with your broker team.
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Frequently asked questions
Why can posted-rate IRD be so high?
Some posted-rate formulas subtract the original discount from the current comparison rate, which can make the rate gap look much larger than the real market difference.
Is this IRD penalty calculator exact?
No. It is an estimate. The final payout depends on your lender's contract wording, exact payout date, comparison rate, fees, privileges, and official payout quote.
Is contract-rate IRD usually better?
It is usually easier to model and often safer than posted-rate IRD, but the right lender still depends on rate, term, privileges, portability, and your likelihood of changing the mortgage early.