# Penalty Calculator: 3-Month Interest vs IRD

> Estimate a Canadian mortgage break penalty: three months’ interest vs IRD, both posted-rate and contract-rate methods shown on a representative lender.

Category: Calculator
Last verified: 2026-09-12
Source: https://ratellow.com/mortgages/penalty-calculator

## TL;DR
- Closed fixed: greater of three months’ interest or IRD. Closed variable: three months’ interest only. Open: $0.
- IRD uses the same formula under both industry methods; they differ only in whether the comparison rate is today’s market rate or posted minus the origination discount.
- Actual IRD varies by lender and by posted vs contract rate. This tool models one representative row — not a named institution. Only a written payout statement is contractual.