Mortgage Prepayment Penalty Calculator (Canada)
Mortgage Prepayment Penalty Calculator (Canada): a planned Super Calculator tool. Stub page: the tool, its formula and a worked example are not published yet.
Mortgage Prepayment Penalty Calculator (Canada) is a planned calculator in the real estate section of Super Calculator, covering country mortgage regimes.
What this calculator will compute
Inputs: balance (CAD), contract rate (%), comparison rate (%), months remaining, posted or discounted comparison method and prepayment privilege used (CAD).
Outputs: three months interest (CAD), IRD penalty (CAD), penalty payable (CAD) and penalty-free prepayment available (CAD).
Formula, recorded as scope and not yet verified against a primary source: On a closed fixed-rate mortgage the penalty is the greater of three months of interest and the interest rate differential, where the IRD is computed from the difference between the contract rate and a comparison rate for the remaining term, applied to the balance over the remaining months. Lenders differ in whether they use posted or discounted comparison rates, which changes the penalty by a large multiple.
Status
This page is a stub. The calculator is not built, no figure on this page has been verified against the authority that sets it, and nothing here should be used to make a decision. The page exists so that the site structure is complete and so that articles can link this concept on first mention.
The stub carries noindex, nofollow and is excluded from the sitemap.