Mortgage penalty calculator
If you want to break your mortgage contract early, you may incurr penalties. While these penalties may come as a result of the sale of your home, you may also be looking at a mortgage refinance which could save you money even after paying mortgage penalties.
The determining factor in your mortgage rate penalty depends on your mortgage rate being fixed or variable. If you have a fixed rate mortgage the penalty you will pay is the greater of the interest rate differential or three months of interest. While someone with a variable rate mortgage will have to pay three months of interest as their penalty.
Mortgage penalty on fixed rate mortgages
When breaking your fixed rate mortgage contract the penalty you pay is often the greater of three months interest or the interest rate differential (IRD).
Mortgage penalty on variable rate mortgages
If you have a variable rate mortgage and you look to break the contract early, the penalty you will pay is often three months interest which is calculated with either your current mortgage rate or the prime rate of the lender.
Interest rate differential (IRD) calculator
This calculator will help you to calculate the interest rate differential on your mortgage. This will help you to estimate the cost of a penalty if you were to break your mortgage contract. You should also review your mortgage contract to see if there are any additional penalties such as a prepayment penalty for breaking your contract early.