Calculate prepayment charges

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 penalties. 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.

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 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.

Additional Resources

If you choose to pay more than your prepayment privileges allow, you may face additional charges or penalties. Learn when and how these charges may apply to you.

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