Mortgage · Blend and extend
Blend and extend calculator.
A blend and extend keeps your current rate on the months you have left and adds today's rate on the extra months, so you end up with one blended rate on a longer term. This shows that rate, the new payment, and the interest cost against staying put or breaking and renewing.
The blended rate is a weighted average: your existing rate weighted by the months remaining, and the new rate weighted by the months you add. Because the balance is the same on both pieces, the weights are simply months.
Inputs
Your blended rate
Fill the form and press Calculate.
How the numbers are worked out
Blended rate = (existing rate × months remaining + new rate × extension months) ÷ (months remaining + extension months). Example: 5.50% for 24 months and 4.00% for 36 more months blends to (5.5 × 24 + 4.0 × 36) ÷ 60 = 4.60%.
Compounding. Section 6 of the federal Interest Act requires a mortgage to state its rate “calculated yearly or half-yearly, not in advance”. This tool compounds half-yearly, so the monthly rate is (1 + rate ÷ 2)1/6 − 1. The Act is used for that and nothing else.
Three columns, one horizon. Everything is compared over the length of the new term. Stay keeps your existing rate to the end of the current term, then assumes a renewal at the new rate you entered (an assumption, since nobody knows the future rate). Blend and extend uses the blended rate for the whole new term. Break and renew uses the new rate for the whole term plus whatever penalty you type in. Payments are re-worked over the remaining amortization each time the rate changes, and the balance still owing at the end of the horizon is shown so a lower payment is not mistaken for a saving.
Source, read 29 September 2026: Interest Act, R.S.C. 1985, c. I-15, s. 6, Justice Laws Website (laws-lois.justice.gc.ca).
Frequently asked questions
Does a blend and extend avoid the prepayment penalty?
You are not paying a penalty as a lump sum, but a blended rate can carry the cost of your old rate forward. Compare the total cost across columns rather than looking at the payment alone.
Will my lender use this exact formula?
Maybe not. This is the simple time-weighted average. Lenders can weight, round, or price the new portion differently, and may offer a different rate than the one you entered. Get the blended rate in writing and enter it here as the new rate to test it.
Why is compounding half-yearly?
Because fixed-rate Canadian mortgages are stated on a yearly or half-yearly basis under section 6 of the Interest Act, and the half-yearly convention is the usual one. A US-style monthly compounding calculator will show a slightly different payment.
Should I extend if rates have fallen a lot?
If today's rate is far below yours, breaking and renewing may cost less in interest but triggers a penalty; a blend costs more in interest but avoids paying one up front. Enter the penalty your lender quoted to see both sides.
Estimate only — confirm with your lender
This tool illustrates a simple blended-rate calculation. It does not know your lender's terms, fees, or the rate you would really be offered, and it does not estimate any penalty. Confirm the blended rate, payment and any fees with your lender before you sign.