Understanding charges that could apply to you.
If you choose to exceed your prepayment privileges during your mortgage anniversary year or decide to pay off your mortgage before your term ends, you may encounter certain prepayment charges. It is important to familiarize yourself with the ways that these charges can be calculated. The helpful worksheet below can give you better insight into possible prepayment charges. Having your mortgage commitment, mortgage renewal agreement or annual mortgage statement handy will help you fill in much of the information required.
Prepayment charge calculator
Please have any of the following items handy for this calculation: your mortgage commitment, your mortgage renewal agreement or your annual mortgage statement.
| Example | Your estimate | |||
| Step 1 | The amount you want to prepay | $250,000 (A) | ||
| Step 2 | Your current interest rate | 0.0359 (B) | ||
| Step 3 | Divide your current rate (B) by 4 | 0.008975 (C) | ||
| Step 4 | Estimated prepayment charge (A x C) | $2,243.75 |
Estimating Interest Rate Differential (IRD):
| Example | Your estimate | |||
| Step 1 | The amount you want to prepay | $250,000 (A) | ||
| Step 2 | Your current interest rate | 0.0359 (B) | ||
| Step 3 | The current rate for a similar mortgage | 0.0315 (C) | ||
| Step 4 | Rate difference (B - C) | 0.0044 (D) | ||
| Step 5 | The number of months remaining on your current term | 24 (E) | ||
| Step 6 | Estimated 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 1 | The amount you want to prepay (the remaining balance of your loan) | $250,000 (A) | ||
| Step 2 | The flat rate (2.75%) as a decimal | 2.75% / 100 = $0.0275 (B) | ||
| Step 3 | Estimated 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 | X | Number of months remaining in your term at the time of repayment | = | Cash-back Repayment |
| Number of months in the term |
Use the online calculator to estimate your prepayment charges.
There are a number of factors that can affect a prepayment charge.
For the exact cost of prepaying your mortgage, please contact our customer service team at 1.888.488.0794 or send us a message through your My Mortgage account.
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 your 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.
The above calculation is based on the accuracy and completeness of the data you have entered, is for illustrative and for informational purposes and is not intended to provide specific financial or other advice, and should not be relied upon in that regard.
This calculation assumes a constant interest rate throughout the amortization period and that the interest rate is compounded semi-annually, not in advance. The mortgage payment amount may vary according to certain variables entered in to the calculator and may not provide the precise dollar amount of your mortgage payment. The results will give you a general idea of the basic mortgage amount and mortgage payment amount based upon the information you have entered.
First National does not make any express or implied warranties or representations with respect to any information or results in connection with the calculator.
First National uses reasonable efforts to include accurate and up-to-date information in this calculator, but cannot guarantee that all information is accurate, complete or current at all times.
Please speak with your mortgage broker to assist you with determining what you can afford.
All First National residential mortgage products are subject to its standard lending criteria.
Rates shown are for high-ratio insured mortgages. Other rates may apply. OAC.
