Free · An estimate, not an offer of credit
Mortgage Rate Comparison Calculator
Two or three offers compared on what they actually cost over the term — payments made, the balance each leaves behind, cashback and fees — and the year the cheapest one changes.
Your offers
- Cheapest
- Rate B
- Its cost
- $125,741
- Its payment
- $3,318
- Payment gap
- $100.75
The answer changes during the term
Rate A at 4.79% is the cheapest of these after one year. Rate B at 4.49% is the cheapest by the end of the 5. Cashback lands on day one and a rate gap accumulates, so which offer wins depends on how long you keep it.
Cost here is payments made, plus what you still owe, less what you borrowed and any cashback. Leaving out that last subtraction is what makes a $600,000 mortgage look like it costs $725,741 over 5 years.
The $3,000 of cashback on Rate A runs out after about 21 months. Over the full 5-year term its higher rate costs $8,630 against Rate B, so the cashback leaves you $5,630 worse off. It is money on closing day, not a saving.
The cheapest rate and the best mortgage are not always the same offer. A broker can put the penalty clause and the prepayment privileges next to these numbers before you commit to one.
Talk to a brokerWhat each offer costs over 5 years
Payments made, plus the balance each one leaves behind, less what you borrowed and any cashback, plus any fees. Every offer is priced on the same $600,000 over the same 25-year amortization, so the only thing being tested is the offer.
Who is ahead, year by year
The ranking changes. Read the year that matches how long you actually expect to hold this mortgage — if that is shorter than the term, the full-term winner is not your answer.
What the gap is made of
- Difference between best and worstRate B is the cheapest over the full 5 years
- $5,630
- Difference in monthly paymentOver 60 payments that is $6,045
- $100.75
- Principal the payment gap hidesThe cheaper rate also pays off more, which no monthly comparison can see
- $2,585
How the cost is worked out
- Payments made over the termRate B, 60 payments of $3,317.50
- $199,050
- Plus the balance still owing
- $526,691
- Less the amount borrowedThe step most comparisons skip, which turns a cost into an outlay and inflates it by the whole mortgage
- −$600,000
- Cost of Rate B
- $125,741
What a rate increment is worth here
- +0.05 of a pointa month, and $1,437 over 5 years on $600,000
- $16.69
- +0.10 of a pointa month, and $2,874 over 5 years on $600,000
- $33.42
- +0.25 of a pointa month, and $7,190 over 5 years on $600,000
- $83.86
- +0.50 of a pointa month, and $14,393 over 5 years on $600,000
- $168.71
A twentieth of a point, by mortgage size
- $400,000a month, $958 over the term
- $11.13
- $600,000a month, $1,437 over the term — your amount
- $16.69
- $800,000a month, $1,916 over the term
- $22.25
- $1,000,000a month, $2,395 over the term
- $27.82
- $1,500,000a month, $3,592 over the term
- $41.73
The cashback, priced
- Rate A — cashback received
- $3,000
- What its higher rate costs over the termAgainst Rate B at 4.49% — payments and the extra balance it leaves behind
- $8,630
- The cashback runs out afterCounting payments alone would have put this later, because the higher rate also pays off less principal
- 21 months
- Net over 5 yearsThe cashback costs more than it is worth over this term
- -$5,630
What these numbers do not include
This compares the cost of the money and nothing else. Prepayment privileges, portability, assumability and — above all — how each lender calculates a break penalty are not in these figures, and the gap between a posted-rate interest differential and a standard one can be several times the rate saving shown here. If there is any chance you break the term early, price that separately before deciding.
A planning estimate on the figures you enter, not an offer of credit. Every offer is priced on the same amount, amortization and term so the comparison is fair — an offer on different terms needs its own comparison. Rate holds are usually 90 to 120 days; confirm how long each offer is actually good for before treating this as settled. Cost means payments made over the term plus the balance still owing, less the amount borrowed and any cashback, plus any fees — subtracting the amount borrowed is what makes it a cost rather than an outlay, and it is the step most comparisons omit. Payments use the Canadian semi-annual convention for a fixed rate. A cashback offer is measured against the cheapest offer carrying none, on full cost rather than payments alone, so the extra balance a higher rate leaves behind is counted. Prepayment privileges, portability and the penalty method are not compared here and can outweigh everything that is.
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What this calculator does
It takes two or three mortgage offers and compares them on what they actually cost over the term, rather than on the rate or the monthly payment. Those two numbers are what lenders quote and neither of them settles the question.
Cost here means everything: the payments you make, the balance still owing when the term ends, less what you borrowed and any cashback, plus any fees. That last bit — subtracting what you borrowed — is what separates a cost from an outlay, and leaving it out is how a $600,000 mortgage ends up described as costing $725,741 over five years when the figure is $125,741.
It also tracks the ranking year by year, because the cheapest offer at the end of the term is often not the cheapest at the start.
- Payment, principal paid, ending balance and cost for every offer
- The cost difference over the term — what shopping the market is actually worth
- The year the cheapest offer changes, if it changes
- What a twentieth, a tenth, a quarter and a half point are worth on your amount
- Cashback priced properly, including the principal it stops you paying off
The payment is the wrong thing to compare
Two offers on the same amount and the same amortization differ in the payment, and that difference is the one everybody looks at. On the figures here it is $100.75 a month between 4.79% and 4.49% — real, but not the whole story.
The cheaper rate also pays down more principal with each of those payments. After five years the 4.49% offer leaves $526,691 owing and the 4.79% offer leaves $529,276 — a $2,585 advantage that never appears in a monthly figure and belongs entirely to the better rate.
Put together: payments alone make the gap $6,045 over the term. The extra balance the higher rate leaves behind adds $2,585, taking the true gap to $8,630 — and only then does the $3,000 of cashback come off it, leaving $5,630. Miss the middle step and you undercount what the better rate is worth by nearly a third.
- Payment difference on these figures: $100.75 a month
- Ending balance difference: $2,585, invisible in any payment comparison
- Both belong to the cheaper rate, and both count
- Compare on cost over the term, never on payment alone
- A lower payment can still be the more expensive offer once cashback and fees are in
Compare over the term, not the amortization
A Canadian mortgage is priced for a term, not for its amortization. At the end of the term the lender reprices you and you are free to leave, so the term is the only window in which any of these offers is actually binding.
Comparing lifetime interest across a full twenty-five years assumes you keep a rate you will renegotiate four or five times. It reliably overstates how much a small gap matters to a decision you will revisit long before then.
Everything here runs over the term you choose, on the same amount and the same amortization for every offer, so the only thing being tested is the offer itself.
- Lenders price and requalify at every renewal — the term is the real window
- Full-amortization interest comparisons overstate small rate gaps
- Amount, amortization and term are held constant across every offer
- An offer on a different term is a different question and needs its own run
- Confirm each rate hold — typically 90 to 120 days — before treating this as final
The cheapest offer can change during the term
This is the part almost no comparison shows. Cashback arrives on day one and a rate gap accumulates month by month, so an offer that is cheapest in year one can be the most expensive by year five.
On the default figures that is exactly what happens. After twelve months the 4.79% offer with $3,000 of cashback has cost $25,181 against $26,421 for the 4.49% offer — it is genuinely the cheapest of the three. By year two the ranking has flipped, and by the end of the five years the cashback offer is $5,630 behind.
Which answer is right depends entirely on how long you actually keep it. Someone certain they will move in eighteen months and someone settling in for the full term are asking different questions, and a page that only ever reports the full-term winner answers one of them.
- Cashback is front-loaded; a rate gap accumulates
- On these figures the cashback offer is cheapest for about 21 months
- It ends the five-year term $5,630 behind
- The right answer depends on how long you will keep the mortgage
- If you might move or refinance early, read the year you are asking about
What cashback is really worth
Cashback is not free money — it is priced into the rate, and the question is only whether the rate premium costs more than the cash is worth over the time you hold the mortgage.
Priced properly, the $3,000 on the default offer is exhausted after about 21 months. Over the full five years the higher rate costs $8,630 against the cheaper offer, so the cashback leaves you $5,630 behind.
Counting payments alone — the usual shortcut — would have put the crossover at 30 months rather than 21, because it ignores the $2,585 of extra principal the higher rate stops you paying off. That is the same mistake as comparing on the payment, appearing in the one place a calculator is supposed to be catching it.
None of which makes cashback always wrong. If the cash is genuinely needed for closing costs, and the rate gap is small, taking it can be the right call. It is simply a loan against your own future payments, and worth knowing the interest rate on.
- Cashback is priced into the rate — it is never free
- On these figures it is exhausted after about 21 months
- Over the full term it leaves you $5,630 behind
- Counting payments alone would put the crossover 9 months later than it is
- It can still be right if you need cash at closing and the rate gap is small
What a fraction of a point is actually worth
Rate differences are quoted in fractions of a percent and it is genuinely hard to tell whether five basis points is worth an afternoon of phone calls. On a $600,000 mortgage over a five-year term, at these rates:
A twentieth of a point is $16.69 a month and $1,437 over the term. A tenth is $33.42 and $2,874. A quarter point is $83.86 a month and $7,190. Half a point is $168.71 and $14,393.
It scales almost exactly with the mortgage amount, so the same twentieth of a point is $958 on $400,000 and $3,592 on $1,500,000. Whether that is worth chasing is a judgment, but it should be an informed one rather than a guess about whether "0.05%" sounds like much.
- On $600,000 over five years: 0.05 of a point is $1,437
- 0.10 of a point: $2,874 · 0.25: $7,190 · 0.50: $14,393
- The figure scales with the mortgage amount, near enough linearly
- The same 0.05 of a point is $958 on $400,000 and $3,592 on $1,500,000
- Judge the number, not how small the percentage sounds
What this does not compare
This page compares the cost of the money. It does not compare prepayment privileges, portability, assumability, or how each lender calculates a break penalty — and that last one can be worth several times everything shown here.
A lender using the posted-rate method to compute an interest rate differential can charge a multiple of what a lender using the standard method would, on an identical balance. Most Canadians break a five-year term before it ends, usually without planning to. A cheaper rate attached to a punishing penalty clause is not obviously the better offer.
That comparison needs inputs this page does not ask for, so it belongs to the penalty calculator rather than being guessed at here. If there is any chance you break early, price it there before you decide.
- Prepayment privileges and portability are not in these figures
- Nor is the penalty method, which can dwarf the rate difference
- Posted-rate penalties can be a multiple of standard-method ones
- Most five-year terms end early, and rarely on purpose
- Price the penalty separately before committing to the cheaper rate
Using your results well
Take the cost figure as your decision number, not the payment and not the rate. Then check the year-by-year table against how long you honestly expect to keep the mortgage — if that is shorter than the term, the full-term winner is not your answer.
If any offer carries cashback, read the crossover before accepting it. If it is longer than you expect to hold the mortgage, the cashback is genuinely worth taking; if it is shorter, you are borrowing against your own payments at a rate nobody quoted you.
And then set this aside and ask about the penalty, the prepayment privileges and whether the mortgage is portable. Those decide whether the cheapest offer is the best one, and they are not in any of these numbers.
- Decide on cost over the term, not on the rate or the payment
- Check the year that matches how long you will actually hold it
- Read the cashback crossover before accepting any incentive
- Confirm the rate hold period on every offer you are comparing
- Then ask about penalties, privileges and portability separately
Common questions
Why compare cost over the term instead of the monthly payment?
Because the payment ignores how much principal each offer pays off. On the figures here the payment gap is $100.75 a month, but the cheaper rate also leaves $2,585 less owing after five years — an advantage that never shows up in a monthly number. Comparing on payment alone systematically understates the better rate, and can point you at the wrong offer entirely once cashback or fees are involved.
What does 0.25% actually cost me on a mortgage?
On a $600,000 mortgage at around 4.5% over a five-year term, a quarter point is $83.86 a month and $7,190 over the term. A twentieth of a point is $16.69 a month and $1,437. It scales with the amount, so the same quarter point is roughly $4,800 on $400,000 and $18,000 on $1,500,000. Use the table above for your own figures.
Is a mortgage with cashback ever worth it?
Yes, if you need cash at closing and the rate gap is small, or if you will not hold the mortgage long. Cashback is priced into the rate, so the real question is when the rate premium overtakes the cash. On the default figures $3,000 of cashback is exhausted after about 21 months and ends the five-year term $5,630 behind. If you expect to move inside that window, taking it is the right call.
Should I compare offers over the full amortization or just the term?
Over the term. Lenders reprice and requalify you at every renewal, so the term is the only period in which an offer is actually binding. Comparing lifetime interest over twenty-five years assumes you keep a rate you will renegotiate four or five times, and reliably overstates how much a small gap matters.
Can the cheapest offer change partway through the term?
Yes, and this is the most commonly missed thing in a rate comparison. Cashback arrives on day one while a rate gap accumulates, so on the default figures the higher-rate offer with $3,000 cashback is genuinely the cheapest of the three after twelve months and the most expensive after five years. The year-by-year table above shows exactly where it crosses over.
Does the lowest rate always mean the best mortgage?
No. This page compares the cost of the money and nothing else. Prepayment privileges, portability and — most importantly — how a lender calculates a break penalty are not in these numbers, and a posted-rate interest differential can be several times a standard-method one on the same balance. Most five-year terms end early. Price the penalty before you decide on the rate.
How long is a rate hold good for?
Usually 90 to 120 days on a pre-approval, though it varies by lender and by product. Confirm the hold on each offer you are comparing — a comparison built on a rate that has expired is not one you can act on, and rate holds do not all start on the same day.
Next step
The cheapest rate is not always the best mortgage.
These figures compare the cost of the money and nothing else. The penalty clause, the prepayment privileges and whether the mortgage is portable can matter more than the rate gap, and none of them are on a rate sheet. Mortgage Directory lists licensed brokers across Canada — placement is never sold, and an enquiry goes to one broker only.