Thinking About Paying Off Your Mortgage Early?

Discover how much you could save and what fees might impact your decision before making your next move.

Prepayment Charge Calculator

Loan Details

Prepayment Charge

Disclaimer: The amount shown is an estimate based on a standard 3‑month interest penalty calculation. Actual charges may differ depending on your lender’s specific terms, including any interest rate differential (IRD). Always refer to your mortgage agreement or consult with your lender for exact figures.

How to Use This Mortgage Prepayment Calculator

Enter Property Information

 Property Value ($) is the total cost of the home you’re considering.
Down Payment (%, $): Enter the percentage or dollar amount of your down payment. A lower down payment may require mortgage insurance.
 Annual Interest Rate (%): The interest rate your lender is offering. If you don’t know your exact rate, you can enter an estimated rate based on current market trends.
Amortization Period (Years) is the number of years over which you plan to repay your mortgage. Typically, this ranges from 15 to 30 years.
Payment Frequency is about how often you want to make payments. A higher frequency can reduce the total interest paid over time.
Mortgage Term (Years): The length of your current mortgage agreement before renewal or refinancing.

Enter Your Income & Expenses

 Gross Income: Your total income before taxes. Choose to input as yearly or monthly.
Heating Costs: Estimated annual or monthly heating costs.
 Property Taxes: The property tax amount you will need to pay.
Credit Card / Line of Credit Payments: Ongoing credit card or line-of-credit payments.
Car Payments: Monthly or yearly car loan payments.
Other Debt Payments: Any additional debts that impact your affordability.

Understanding Mortgage Prepayment Penalties

What is a Mortgage Prepayment Penalty?

If you break your mortgage early by selling, refinancing, or switching lenders before your term ends, your lender may charge you a prepayment penalty to compensate for lost interest.

Most lenders calculate penalties based on either 3 months of interest or an Interest Rate Differential (IRD), whichever is higher.

Penalties can range from hundreds to tens of thousands of dollars depending on your mortgage balance and rate.

Some lenders allow partial prepayments without penalties, so it’s important to know your terms.

Knowing your penalty in advance helps you decide if breaking your mortgage is financially worth it.

Frequently Asked Questions (FAQs)

Now That You Know Your Penalty, What’s the Smartest Move?

Should you pay it? Avoid it? Negotiate a better deal? Let’s go over your options so you don’t pay more than necessary.

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