Should You Refinance Your Home Mortgage?

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Evaluate if refinancing home mortgage is worth it using Eva’s missed investment value method, factoring in penalties, legal fees and long-term financial impact.

Last update Dec 2024
  • Scenario 1: Cost of Refinancing Mortgage
  • Scenario 2: Cost of Keeping Current Mortg.
  • Which One Is Higher (%)

Compare refinancing vs. keeping your mortgage using the missed investment value of payments. For Canadian homeowners, where costs aren’t tax-deductible, this highlights lost growth potential and the full time value of money.

# Years from Now
Try your numbers:

The remaining balance on your current mortgage.

A =

The interest rate on your existing mortgage.

B =

The number of years left on your current mortgage term.

C =

The interest rate you are being offered for the new mortgage.

D =

The length of the new mortgage term, typically reset to the default 25 years for refinanced mortgages in Canada. This extended term is often suggested by banks to maximize affordability and their profits.

E =

The penalty cost for breaking your current mortgage.

F =

The estimated legal and administrative costs for refinancing.

G =

Any additional costs associated with refinancing.

H =
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  • Amount
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  • Cash Flow
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  • Percentage
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Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

This scenario evaluates the total cost of refinancing your mortgage, factoring in penalties, legal fees, and other refinancing costs (rolling them into the new mortgage). It calculates the missed investment value of the new payment schedule over the extended term. The result reflects whether refinancing unlocks financial benefits or adds hidden costs in the long run.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

I =
0

Calculations

(Expressions are evaluated at every year.)

J̃ =
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