About the Mortgage Break Cost Estimator
Breaking (exiting) a fixed-rate home loan before the end of its fixed term can trigger a break cost, sometimes called an economic cost or early repayment cost. This tool gives a rough, simplified approximation of what that might look like, so you have a ballpark figure before contacting your lender for an exact quote.
How it works
This uses a simplified economic-cost approximation, not your lender's actual method. If today's comparable rate is equal to or higher than your fixed rate, the estimated break cost is $0 — the lender hasn't lost anything by you leaving early, because it can re-lend the money at the same or a better rate. If today's rate is lower than your fixed rate, the estimate scales the rate gap by your remaining balance and remaining fixed-term years: balance × (your rate − today's rate) ÷ 100 × remaining years.
Assumptions and behaviour
- Treats the rate gap as constant over the remaining term, which real wholesale-rate-based formulas don't — they use the market's current swap-rate curve for the exact remaining period.
- Assumes the loan balance stays roughly constant over the remaining term (no further principal reduction modelled) for simplicity.
- Break cost is floored at $0 — this tool never estimates a negative break cost.
Limitations
- The real formula each lender uses is proprietary and based on movements in their wholesale funding (swap) rates over your loan's exact remaining fixed period — not simply today's advertised comparable rate.
- Actual break costs can be significantly higher or lower than this estimate, and some lenders also charge a separate administrative discharge fee on top.
- This tool is for rough budgeting purposes only — always request an exact figure from your lender in writing before deciding to break a fixed-rate loan.
Privacy
The calculation runs entirely in your browser. Nothing is uploaded or stored.
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