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RateSupermarket.ca > Mortgage rates > Mortgage penalty calculator
Mortgage penalty results
The penalty to break your mortgage is typically the greater of 3-months interest or the IRD.
| 3-months interest | $0.00 |
| Interest rate differential (IRD) | $0.00 |
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* This penalty calculator is meant to be a rough guide only, and calculations are approximate. RateSupermarket.ca does not take any responsiblity for any of the results and always encourages you to contact your lender directly for an exact penalty quote.
About mortgage penalties
For fixed-rate mortgages the penalty is typically the greater of 3-months interest or the IRD. These are rough estimates and will not precisely match your actual penalty. Each lender has its own formula for calculating penalties and some lenders use posted rates for their IRD calculation and some use discounted rates. While still other lenders round up to the next longest term when determining comparable IRD interest rates. Some round down.
The Interest Act prohibits IRD penalties on terms over 5 years,after five years has elapsed. In such cases, a maximum 3-month interest penalty may apply. For example, someone who has been in a 6-year mortgage for 60 months or more would pay a 3-month interest penalty (maximum) to break it before maturity.
A small number of lenders prohibit breaking a mortgage early—regardless of the penalty—unless in the case of an approved bonafide sale.
The moral: Always contact your lender directly for an exact penalty quote.
