The basic Penalty Calculator gives you a fast, fair estimate. The advanced options dial it in to a much more accurate number - closer to what the lender will actually quote.
Why Advanced Options Matter
The penalty calculation uses a comparison rate to figure out the differential. Without advanced options, we use the lender's monthly average posted rate as the fallback. With advanced options, we can narrow into the exact posted rate on the day the client signed, which is what the lender's calculation uses.
The difference can be hundreds or thousands of dollars on a big mortgage.
Cashback
If the client received cashback at signing, the lender will typically claw it back as part of breaking the mortgage. Add the cashback amount in the advanced options so we can factor it in:
- We add the cashback to the effective penalty.
- Your net savings number reflects the true cost of breaking.
Closing Date
The closing date is when the client's mortgage was originated. This is the most powerful single input:
- We use it to look up the exact posted rate the lender had on that date.
- That's the rate the lender will use in their own penalty math.
- Without it, we fall back to the monthly average for the closing month, which is close but not exact.
If your client knows their closing date (it's on their mortgage documents), enter it.
Discount Rate
The discount rate is the difference between the lender's posted rate at signing and the discounted rate the client actually got. Discount rates matter because:
- Some lenders use the discount rate as their comparison rate (which favours the client).
- Others use the posted rate (which favours the lender - bigger penalty).
- Knowing the discount rate at signing lets us match the right lender-specific math.
If you know it, enter it. If you don't, we default to a reasonable estimate.
When To Use Advanced Options
- Always, if you have the data - there's no downside.
- Especially for large mortgages where a few basis points of error become thousands of dollars.
- For meeting prep when the client wants a specific number they can rely on.
What To Do Next
- See the full lender comparison: Comparing Lender Options.
- Understand lender-specific math: Lender-Specific Penalty Math.