After the Bank of Canada interest rate hike last week, the CTV’s Pat Foran, did a story on some misunderstandings about the dreaded mortgage penalty. Many Canadians believe that the penalty to get out of your mortgage early is typically 3 month’s interest. However, it really depends on the lender and type of mortgage you have, and some lenders will do the higher of 3 month’s interest and the interest rate differential. The customer story profiled was about a divorced Toronto woman who was surprised to find out it would cost her $18,000 to get out of her mortgages.
You can read our article on the difference between mortgage penalties here.
We’ve also created a handy mortgage penalty calculator to help you estimate the 3 month interest penalty as well as the IRD or interest rate differential here.