How much does it cost to refinance a mortgage in Canada?

Short answer: Refinance costs in Canada usually include a couple of thousand dollars in one-time fees for the lawyer, appraisal, title insurance and discharge, plus a prepayment penalty if you break your mortgage before the term ends ^[1][3]. The fees are fairly predictable. The penalty is not: it can be zero at renewal, a few thousand dollars on a variable rate, or much more on a fixed rate ^[2].

Here's what each cost is, what it typically runs, and how to keep the total down. If you're weighing whether to refinance at all, our mortgage refinancing page explains how an 8Twelve agent compares options across 65+ lenders.

Refinance costs at a glance

Ranges are from the sources cited and are not quotes. Ask your lender and lawyer for written amounts.

One useful detail: for federally regulated lenders, legal and appraisal costs the lender requires are counted in the cost of borrowing they must disclose, while prepayment penalties, discharge fees and registry fees are not ^[9]. So look beyond the APR when you add up refinance costs.

The biggest variable: your prepayment penalty

If you refinance a closed mortgage before the end of the term, you'll normally pay a prepayment penalty, which can cost thousands of dollars ^[1]. With an open mortgage, there's no penalty ^[2].

The penalty is usually the higher of ^[2]:

• three months' interest on what you still owe, or
• the interest rate differential (IRD): roughly, the interest the lender loses because today's rates for your remaining term are lower than your rate.

Lenders usually use the IRD when your mortgage rate is higher than current rates and you signed your contract less than five years ago ^[2]. How lenders calculate it varies, and your lender must explain its method ^[2]. FCAC's own example shows how wide the gap can be: on a $200,000 balance, three months' interest was about $3,000, while the IRD was about $12,000 ^[2].

Always ask for a written penalty quote dated close to your planned closing. It's the single number that most often decides whether a refinance is worth it.

Find out what your refinance would really cost. An 8Twelve agent can get your penalty quote and line up offers from 65+ lenders, OAC. Explore mortgage refinancing

Worked example: refinancing a $400,000 mortgage

Illustration only (assumed figures, not quotes): a $400,000 balance. Mid-term variable rate of 4.20%. Mid-term fixed rate of 5.00% with 24 months left, compared with an assumed 4.00% rate for a similar term, giving a simplified IRD of about 1% × $400,000 × 2 years.

What it shows: the fees are similar in every case. Timing and mortgage type drive the difference. Many people find it makes sense to line up a refinance with their renewal date, or to ask whether a blend-and-extend could meet their goal without a penalty.

Costs that depend on your situation

• Mortgage loan insurance: you may have to pay a new premium if your loan amount increases or you extend your amortization when you switch ^[5].
• Collateral charge mortgages: removing a collateral charge and registering a new one can mean extra fees, and every loan secured by that charge must be paid off or moved ^[5].
• Alternative and private lenders: these usually add lender and brokerage fees on top of the usual costs. See our breakdown of private mortgage refinance fees in Ontario.
• Qualifying: you can usually refinance up to 80% of your home's appraised value ^[3][8], and most new uninsured mortgages must pass the stress test, the greater of your contract rate plus 2% or 5.25% ^[7].

How to lower your refinance costs

1. Refinance at renewal. There's no prepayment penalty once your term ends ^[2].
2. Use your prepayment privileges first. A lump-sum prepayment before breaking means any penalty is based on a lower balance ^[2].
3. Ask about a blend-and-extend. Your lender blends your current rate with a new one, with no prepayment penalty, though admin fees may apply ^[1].
4. Ask the lender to cover costs. FCAC suggests asking a new lender to pay some or all of your switching costs ^[5].
5. Consider a HELOC instead if you only need access to funds. You can borrow up to 65% of your home's value, though the rate is variable ^[3]. Compare our home equity line of credit options.
6. Get quotes in writing from your lender (payout and penalty) and your lawyer (fees and disbursements) before you commit.

Are refinance costs worth it?

Compare the total one-time cost with what you'll gain over the new term: lower interest, a lower payment, or debt you can pay off. If a lower rate saves you $150 a month and refinancing costs $6,200, it takes about 41 months to recover the cost (illustrative). If your goal is to consolidate high-interest debt, the saving can be much larger, as long as you don't stretch that debt over decades. FCAC cautions that extending your amortization raises your interest costs ^[5].

Step by step: getting an accurate cost estimate

1. Request a payout statement and penalty quote from your current lender.
2. Confirm your charge type (standard or collateral) and any cash-back clawback ^[1][5].
3. Get a lawyer's quote for fees, title insurance and registration.
4. Ask each lender whether it pays for the appraisal, legal fees or discharge.
5. Compare the full cost against the savings over the new term, not just the new rate.

From our desk: The penalty quote is the first thing we ask for. More than once it has shown that waiting a few months for renewal was worth more than a slightly lower rate today.

Refinance costs come down to a predictable set of fees plus one big variable, your prepayment penalty. Get the penalty quote first, time the refinance with your renewal if you can, and compare the full cost with what you'll gain.

Check your numbers: estimate a new payment with our mortgage payment calculator.

This article is for general information only and isn't financial, legal or tax advice. Rates, products and terms change without notice and are available on approved credit (OAC). The rate and terms you qualify for depend on your individual financial situation, including credit, income, property and loan-to-value. "Best rates" means the most suitable options available for your situation, not a guarantee of the lowest rate. Example rates and payments are for illustration only, as of October 2026, and are not an offer. 8Twelve Mortgage arranges mortgages through 65+ lenders and does not lend directly. Licensed across Canada — see our licences.

Cost ranges come from the cited FCAC and lender pages as of October 20, 2026. Worked-example figures are assumptions for illustration, not quotes; your penalty, legal and appraisal costs will differ by lender, province and property. The IRD shown is simplified; lenders use their own methods.