FOR CUSTOMERS

Understanding mortgage prepayment charges.

If you choose to pay off your mortgage early or exceed your annual prepayment privilege allowance, you may have to pay prepayment charges. Anticipating when these costs apply and how much they could be helps you make informed decisions and plan ahead.

Calculate your estimated prepayment charges Review our glossary of terms

The types of mortgage prepayment charges and when they apply

If you have a closed mortgage, prepayment charges may apply if you sell your home and pay out your mortgage before maturity, renew or refinance early, exceed your prepayment privileges or switch to another lender. The type of mortgage you have determines how prepayment charges get calculated.**


Closed adjustable-rate mortgage

Three months interest on the amount being prepaid.

Learn more

Closed fixed-rate mortgage

The greater of either three month’s interest on the amount being prepaid, or an Interest Rate Differential (IRD)*.

Learn more

Open mortgage

No prepayment charges apply.

Learn more

* Interest Rate Differential (IRD): the difference between your current mortgage interest rate and the current First National interest rate on a replacement mortgage for the time remaining on your mortgage term.

**Prepayment penalties are subject to change based on changes in interest rates, the passing of an anniversary date or upon the conditions set out in certain mortgage products. Please refer to your mortgage documents, log into My Mortgage or contact our customer service team at 1.888.488.0794 for more information.

Prepayment charges can change if:

  • First National's rates change (changes to the First National posted rates will affect IRD* calculations).
  • The remaining term of your mortgage changes or an anniversary year passes (which affects the amount of interest charged and IRD* calculations)
  • Your principal balance changes (unpaid mortgage payments, other fees and charges added to the mortgage or other changes to the outstanding mortgage balance will affect prepayment charges).
  • The term of your mortgage is greater than five years. After the 5th anniversary date, the prepayment charge is calculated using a three-month interest charge.

For details specific to your mortgage, review your original mortgage documents or contact us at 1-888-488-0794.

Other factors that impact prepayment charges:

  • If, at the time of a mortgage prepayment, there are less than three months remaining before a closed mortgage matures, a per-diem prepayment charge applies for the duration of the remaining term (calculated using your current interest rate).
  • There are other charges that could potentially apply when paying down or paying off your mortgage:
    • If you prepay your mortgage in full, you may be charged an administration fee for discharge documentation.
    • If you received cash back with your loan and are prepaying your mortgage in full, you may be required to reimburse a portion of the cash back amount.

 

HELPFUL TOOLS

When prepayment charges may apply to you.

Depending on how you choose to manage your mortgage and payments, there may be times when you have to pay additional charges. Use our prepayment calculator or watch our helpful video to learn more.

How mortgage prepayment charges are calculated

Mortgage prepayment charges are calculated in different ways for fixed rate and adjustable-rate mortgages. Understand how the calculations apply based on the type of mortgage you have.

Additional mortgage resources

These mortgage resources are worth bookmarking for future reference – information on mortgage costs and a glossary of terms to look up any mortgage concepts you may not understand. 

Prepayment calculator

Estimate your prepayment charges using our helpful prepayment calculator. You can also estimate your prepayment charges by logging into your My Mortgage® account.

Estimate your prepayment charges
Today's Featured Rate
 
 
Updated September 29, 2026
View all rates

Rates are for single-family residential mortgages. Actual rates may vary. Please contact First National toll-free at 1.888.670.2111, send us a message through your My Mortgage account or speak with your mortgage broker for further information. Rates are subject to change without notice. E. & O. E.

The most asked questions about mortgage prepayment charges

Being prepared can help you anticipate and plan for mortgage prepayment charges. These questions and answers are a good place to start.

What is a mortgage prepayment charge?

A mortgage prepayment charge is a fee that may apply if you choose to pay off all or part of your mortgage earlier than the maturity date outlined in your original mortgage agreement.

When would a mortgage prepayment charge apply?

There are several scenarios when you may have to pay a prepayment charge. Most commonly, breaking your mortgage early due to refinancing, selling your home, switching lenders or exceeding your annual prepayment privilege allowance.

Can I estimate my mortgage prepayment charges?

Use the Prepayment Calculator or Prepayment Worksheet for an estimate of possible mortgage prepayment charges. For a more personalized quote, log in to My Mortgage® and use the calculator available there. You can also contact our customer service team at 1-888-488-0794.

Why is my mortgage prepayment charge higher than expected?

Prepayment charges can vary based on your mortgage type, interest rates, remaining balance, and the amount of time left in your term.

How can I avoid mortgage prepayment charges?

If you pay off your mortgage on your maturity date, prepayment charges typically don’t apply. But you may still have to pay administrative fees. If you only want to pay down a portion of your mortgage, you can use your prepayment privileges. As long as you stay within your annual prepayment privilege allowance, you can avoid prepayment charges or fees. Learn more about paying down your mortgage faster here.

The simple, stress-free way to manage your mortgage.

Manage your mortgage how you want, when you want. Log in to My Mortgage® at mymortgage.firstnational.ca – it’s easy to understand, easy to use and will save you time.

Log in to My Mortgage® Register for My Mortgage®