The Penalty Calculator answers one question fast: what will it cost this client to break their current mortgage today? It's a standalone tool - useful whether the client is in your book or not.
Where To Find It
In the sidebar under Tools, click Penalty Calculator.
Inputs
Fill in:
- Lender - pick from the list. If your client's lender isn't in the default list, see Adding A Custom Lender.
- Current Rate - what the client is paying today.
- Balance - current mortgage balance.
- Months Remaining - how many months until their maturity date.
Click Calculate.
Reading The Result
You get back:
- IRD penalty - the interest rate differential calculation.
- 3-Month Interest penalty - three months of interest at the current rate.
- Effective Penalty - whichever is higher. That's what the lender will actually charge.
IRD Vs 3-Month Interest
Lenders charge whichever is higher of these two:
- IRD wins when the client's rate is significantly higher than current rates AND they have meaningful time left on their term.
- 3-month interest wins when the client's rate is close to current rates, or when they're near the end of their term.
We tell you which one applies. For the deeper math, see Understanding IRD Math.
When The Result Is An Estimate Vs Lender-Exact
Our penalty estimate is close but not always identical to what the lender will quote. Reasons:
- The lender's internal comparison rate on the day of payout can drift slightly from public rate history.
- Some lenders apply additional fees.
- Discharge fees and admin fees aren't included in the penalty estimate.
For the most accurate estimate possible, use the advanced options - closing date and discount rate let us hit the exact historical posted rate.
What To Do Next
- Refine the estimate: Advanced Options In The Penalty Calculator.
- See lender options side-by-side: Comparing Lender Options.
- Save the result as a PDF: Downloading The Penalty Result And Lender Options.