Prepayment Penalty Estimator

If you break or refinance early, lenders charge a penalty. There are two common methods: Interest Rate Differential (IRD) and Three-Month Interest. This tool computes both and highlights the lower-cost option.

Your current principal balance.
%
Your agreed mortgage interest rate.
%
Rate lender uses for IRD calculation.
Years left until your mortgage matures.

Estimated Penalties

IRD Penalty
Calculated as (Contract Rate − Posted Rate) × Balance × Years Remaining.
3-Month Interest Penalty
Three months of interest at your contract rate.
Lower-Cost Option
Choose this method to minimize your penalty.
Comparison of IRD vs. 3-Month Interest penalties