We don't use one generic IRD formula across every lender. Each lender in our list has lender-specific math that mirrors what that lender actually charges.
Why Lender-Specific Math Matters
Different lenders use different comparison rates in their IRD calculation:
- Some use the discounted rate at signing minus today's rate (broker-friendly, smaller penalty).
- Some use the posted rate at signing minus today's discounted rate (broker-unfriendly, bigger penalty).
- Some use prime-based math for variable mortgages.
A generic formula would be wrong half the time. Lender-specific math gets us close to the lender's actual quote.
Where Our Lender Math Comes From
We pull from each lender's publicly shared disclosures:
- Prepayment penalty calculation methodology documents (most major lenders publish these).
- Mortgage commitment letter standard terms.
- Posted rate history for the comparison rate inputs.
When a lender updates their disclosed methodology, we update our math.
Lenders We Cover
We cover the major Canadian lenders out of the box - every "Big Five" bank, plus the major monoline and B lenders. Common ones include:
- Scotiabank, TD, RBC, BMO, CIBC
- National Bank, Desjardins
- MCAP, First National
- B2B, Equitable Bank, Home Trust
- ...and more
If your client's lender isn't in our list, you have two options:
- Use "Other" - falls back to a generic IRD formula. Less accurate, but better than nothing.
- Add a custom lender with your own rate data: Adding A Custom Lender.
What "Other" Falls Back To
When you pick Other, we use a standard IRD formula with posted rate minus current posted rate as the comparison. This is a reasonable middle-ground estimate but won't match any specific lender's exact math.
When To Treat Our Number As Conservative Vs Aggressive
- Conservative - most lender-specific formulas in our system err slightly on the high side (better to overestimate a penalty than under-promise savings to a client).
- Always confirm with the lender before locking in a refinance, especially on large balances.
What To Do Next
- See how lender math drives candidate detection: How Candidates Are Detected.
- Add lenders we don't cover: Adding A Custom Lender.