This is because most mortgage early payout penalties are calculated on (1.) three months interest payment or (2.) the interest rate differential whichever is the GREATEST!!
- Do not assume the same lender charges penalties the same way for each type of mortgage.
- Do not assume the penalty charges you agreed to with the original mortgage document are the same when you renew with the same lender. Policies concerning penalty charges are always changing.
- Do not assume the same wording means the same calculation with different lenders. For example the term “interest rate differential” means very different penalty policies for different lenders. The terminology is not used consistently throughout the industry.
- Do not assume your legal representative and the Realtor, is familiar with all the constantly changing different ‘twists and turns’ of penalty charges.
Justin Havre is the top producing REALTOR® with RE/MAX First, Canada's very first RE/MAX brokerage. Calgary real estate is his passion; Justin specializes in Southwest & Northwest Calgary homes for sale. He can be reached at 403.217.0003 or contacted through this site.