- 100% FREE
- ~3 min
- For Homeowners selling before renewal
- Three months' interest and IRD scenarios
- Licensed Ontario REALTOR®
Only your lender can quote your actual penalty. Every lender uses its own posted rates, discounts and formulas, and the numbers here are a simplified illustration built entirely from what you enter. This is not mortgage advice.
Mohammed Mustaf, Real Estate Salesperson · HomeLife Miracle Realty Ltd., Brokerage
Not intended to solicit properties currently listed for sale or buyers or sellers under contract.
Educational use only: This tool provides educational information only and is not a rental approval, mortgage approval, tenant-screening decision, legal advice or guarantee.
Your lender's current rate for a term similar to what is left. Ask them for this figure.
Illustration only
Estimated exit costs
Three month interest
$6,357
Balance times rate, three months
Interest rate differential
$7,887
0.70% gap over 26 months
Likely penalty method
Greater of the two
Typical for fixed rate mortgages
Estimated penalty
$7,887
Discharge and legal
$2,150
Estimated total exit cost
$10,037
Ask your lender directly whether your mortgage is portable. Porting can sometimes avoid the penalty entirely if you buy again within their timeframe.
What to ask your lender
- What is my exact prepayment penalty if I discharge on my expected closing date?
- Which formula do you use, and which posted or discounted rate goes into it?
- Is my mortgage portable, and what is the deadline to port after closing?
- Can I prepay a lump sum before discharging to reduce the penalty?
- What discharge, administration or assignment fees apply?
Save your report
Private: never indexed, never posted publicly.
Mohammed Mustaf, Real Estate Salesperson, HomeLife Miracle Realty Ltd., Brokerage. RECO Registration No. 6004851. Educational only, not mortgage, legal or financial advice.
How it works
Three simple steps
1Enter your mortgage details
Balance, current interest rate, fixed or variable, months remaining, and optionally a comparison or posted rate you have looked up.
2Compare two scenarios
Three months' interest is shown for every mortgage. The IRD scenario is shown when you supply a comparison rate and there are months remaining in the term.
3Confirm with your lender
Take the scenarios to your lender and request a written discharge statement before you commit to a closing date.
Benefits
Why renters & buyers use it
- Understand why a penalty exists and roughly how large it could be.
- See both common calculation methods side by side.
- Plan your net proceeds more realistically.
- Know what to ask your lender before you list.
- Private: nothing about your mortgage is stored.
Educational context
How this works in Ontario
In Canada, breaking a closed mortgage before the end of its term usually triggers a prepayment charge. Variable-rate mortgages commonly use three months' interest. Fixed-rate mortgages commonly use the greater of three months' interest or an interest rate differential, and lenders calculate IRD in materially different ways, often using posted rates rather than the rate you were given. Discharge fees, and in some cases the loss of a cash-back or a rate-hold benefit, can also apply.
What your result means
Read your result carefully
These are illustrative scenarios only. Canadian lenders use different mortgage contracts and penalty methodologies. Confirm the exact discharge amount and penalty directly with your lender before making a decision. This is not mortgage advice and Mohammed Mustaf is not a mortgage professional.
Talk to a licensed REALTOR®
Prefer a real conversation?
Bring your results to a free, no-obligation call with Mohammed Mustaf. He responds personally within one business day.
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