Refinance Calculator Ontario

Use this refinance calculator to determine if refinancing your mortgage in Ontario is financially beneficial. Compare your current loan terms with potential refinanced options to estimate savings and determine the best time to refinance.

How to Use This Calculator

To use the refinance calculator, follow these steps:

Enter your current mortgage details including the principal amount, current interest rate, and remaining term.
Input the potential refinanced loan details including the new interest rate and term.
Click "Calculate" to see your estimated savings and payment comparison.
Review the results and consider other factors before making a decision.

The calculator will show you the monthly payment comparison, total interest paid, and estimated savings over the life of the loan.

Formula Used

The refinance calculator uses the standard mortgage payment formula to calculate payments for both your current and potential refinanced loans:

Monthly Payment = P × (r(1 + r)^n) / ((1 + r)^n - 1)

Where:

P = Principal loan amount
r = Monthly interest rate (annual rate divided by 12)
n = Number of payments (loan term in years × 12)

The calculator compares these payments to determine potential savings and interest differences.

Worked Example

Let's look at an example to understand how the refinance calculator works.

Current Loan Details

Principal: $300,000
Interest Rate: 4.5%
Term: 25 years

Potential Refinanced Loan Details

Principal: $300,000
Interest Rate: 3.5%
Term: 25 years

Using the calculator, we find:

Current monthly payment: $1,636.32
Refinanced monthly payment: $1,523.03
Monthly savings: $113.29
Total interest paid over 25 years: $163,632 (current) vs $136,758 (refinanced)
Total savings: $26,874

This example shows that refinancing could save you $113 per month and $26,874 over the life of the loan.

Frequently Asked Questions

When is the best time to refinance in Ontario?: The best time to refinance in Ontario is typically when interest rates are lower than your current rate, or when you can secure a better deal on closing costs and fees.
How much can I save by refinancing?: Savings vary based on your current rate, new rate, loan term, and principal amount. Use our calculator to estimate your potential savings.
Are there any fees associated with refinancing?: Yes, refinancing typically involves closing costs and fees, which can range from 2% to 5% of your loan amount. These costs should be factored into your decision.
Can I refinance if I have a variable-rate mortgage?: Yes, you can refinance a variable-rate mortgage to a fixed-rate mortgage, but you should carefully compare the terms and potential savings.
What happens if interest rates rise after I refinance?: If you have a fixed-rate mortgage, your payments will remain the same regardless of interest rate changes. If you refinance to a variable-rate mortgage, your payments may increase if rates rise.