In general, lenders use the greater of the two values below (3 Month's Interest, or Interest Rate Differential (IRD)). Here's who much you should expect to pay:
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About Mortgage Penalties
This penalty calculator is meant to be a rough guide only. This penalty calculator is meant to be a rough guide only. Each lender has their own formula for calculating penalties and some use posted rates for their IRD calculation while others use discounted rates. A small number of lenders prohibit breaking a mortgage early -- regardless of the penalty -- unless in the case of an approved sale.
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 the 3-month interest penalty to break the mortgage contract before maturity. RateSupermarket.ca encourages you to contact your lender directly to find out your exact mortgage penalty.