You want to take advantage of lower mortgage rates, right? To get out of your old mortgage you must pay a “penalty”. Find out quickly! You only require 5 pieces of information to QUICKLY and easily calculate the proper IRD.

Suppose you have a mortgage balance of $200,000 and 30 months left on your term. The original rate was 5.5% and the current rate for a similar term is 3.5%.

Type $200,000 in the Current Balance box. Type the original rate of 5.5% in the Rate AIR (%) box. Type 30 months in the Time remaining in Term box. Type 300 months for the Amortization Period if it was a twenty five year mortgage or using the option button type in the Payment. Type the new rate of 3.5% in the New Rate AIR (%) box , then click, Click to calculate the IRD and voila, the IRD shows up immediately in the red box at the bottom of the screen as $9,169.08.
What could be simpler?

Once your information is on the screen you can quickly play what if games by using your mouse and clicking the up and down arrows of the Change New Rate and Change Term boxes. Knowledge is power and it puts you in the drivers seat.

If you don’t have this IRDcalculator the only way to check if the “penalty” is correct is by getting TWO amortization schedules. One schedule for $200,000 at 5.5% with monthly payments of $1,220.78 and a second schedule for $209,169.08 at 3.5% with the same monthly payments of $1,220.78. Comparing the two schedules, the balance owing after 30 months on both schedules must be the same, else the IRD is incorrect!