Mortgage Refinance Calculator Ontario
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Reviewed by Calculator Editorial Team
Use this mortgage refinance calculator to estimate your potential savings when refinancing your home loan in Ontario. Compare different interest rates, terms, and fees to make an informed decision about whether refinancing is right for you.
How to Use This Calculator
Enter your current mortgage details and the new loan terms you're considering to calculate your potential savings. The calculator will show you:
- Monthly payment difference
- Total interest saved over the loan term
- Break-even period for the refinance
For the most accurate results, use your exact current mortgage balance and the precise terms of the new loan offer you're considering.
Formula Used
The calculator uses the standard mortgage payment formula to calculate both your current and potential new monthly payments:
Monthly Payment = P × [r(1 + r)n] / [(1 + r)n - 1]
Where:
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12)
- n = Number of payments (loan term in years × 12)
The savings are calculated by comparing the difference between your current and new monthly payments, multiplied by the number of payments remaining on your loan.
Worked Example
Let's say you have a $300,000 mortgage with a 5-year term at 4.5% interest. You're considering refinancing to a 30-year term at 3.5% interest.
Current monthly payment: $7,114.56
New monthly payment: $1,833.33
Monthly savings: $5,281.23
Total savings over 30 years: $2,105,654.60
Break-even period: 1.5 years
Key Considerations
Closing Costs
Refinancing typically requires paying closing costs, which can range from 2% to 5% of your mortgage balance. These costs must be factored into your decision-making process.
Interest Rate Changes
While you're locking in a lower rate now, interest rates can change. Monitor market conditions and consider how long you plan to stay in your home.
Amortization Period
Refinancing to a longer term can lower your monthly payments but may increase your total interest paid over time. Consider your financial goals when choosing a term.
This calculator provides estimates only. Actual savings may vary based on your specific financial situation and the terms of your new loan.
Frequently Asked Questions
How often should I consider refinancing my mortgage?
It's generally recommended to review your mortgage every 1-2 years or when significant life changes occur, such as a job change, marriage, or the birth of a child. Also consider refinancing when interest rates drop significantly below your current rate.
What types of mortgages can I refinance into?
You can refinance into various types of mortgages, including fixed-rate, variable-rate, and specialized products like bi-weekly or interest-only mortgages. The best option depends on your financial situation and goals.
Are there any risks to refinancing?
Yes, refinancing can have risks including paying closing costs, extending your loan term, or taking on more debt than you can manage. It's important to carefully compare all options before proceeding.
How long does the refinancing process take?
The refinancing process typically takes 30-45 days from application to closing, though this can vary depending on your lender and the complexity of your situation.