RESIDENTIAL_Calculate_Prepayment

Calculating Prepayment Charges

To help you calculate your prepayment charges, it might be handy to have any of the following available:

  • your mortgage commitment;
  • your mortgage renewal agreement; or
  • your annual mortgage statement

Estimating three months’ interest:

  
Example
 
Your estimate
Step 1The amount you want to prepay$250,000 (A) 
Step 2Your current interest rate0.0359 (B) 
Step 3Divide your current rate (B) by 40.008975 (C) 
Step 4Estimated prepayment charge (A x C)$2,243.75

Estimating Interest Rate Differential (IRD):

  
Example
 
Your estimate
Step 1The amount you want to prepay$250,000 (A) 
Step 2Your current interest rate0.0359 (B) 
Step 3The current rate for a similar mortgage0.0315 (C) 
Step 4Rate difference (B - C)0.0044 (D) 
Step 5The number of months remaining on your current term24 (E) 
Step 6Estimated prepayment charge
(A x D x E) / 12
$2,200.00 

Flat Rate Prepayment Estimate:

Some mortgage products may be subject to a flat rate charge. The flat rate can be calculated as follows: 

  
Example
 
Your estimate
Step 1The amount you want to prepay (the remaining balance of your loan)$250,000 (A) 
Step 2The flat rate (2.75%) as a decimal2.75% / 100 =
$0.0275 (B) 
 
Step 3Estimated prepayment charge (A x B)$6,875 

If you received a cash-back initially on your mortgage or at renewal, you may need to repay a portion of the cash-back amount when you prepay your mortgage in full. 

The amount of cash-back reimbursement is calculated as follows:

Cash-back
amount
XNumber of months remaining in your term
at the time of repayment
=Cash-back
Repayment
Number of months in the term

Click here to use the online calculator to estimate your prepayment charges. 

There are a number of factors that can affect a prepayment charge. Click here to find out more. 

For the exact cost of prepaying your mortgage, please contact customer service.

Notes:
  • If there are less than 3 months remaining to maturity on a closed mortgage at the time of prepayment, a per-diem prepayment charge, calculated using our current interest rate, applies for the remaining term.
  • For mortgages with terms greater than 5 years, after the 5th year the prepayment charge is calculated using a 3 month interest charge.
  • Please refer to your mortgage documents for your specific prepayment privileges.
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