Ontario mortgage help

Mortgage prepayment penalties in Ontario

A calculator can illustrate common penalty methods, but only the lender can provide the contract-specific payout amount for a particular date.

Reviewed August 31, 2026Published by Ontario Mortgage HelpHow we review

What to do first

  1. Check whether the mortgage is open or closed and whether the rate is fixed or variable.

  2. Find the annual lump-sum and payment-increase privileges in the mortgage contract.

  3. Use the lender's penalty calculator, then request a written payout statement for the expected date.

  4. Ask how the lender treated the original rate discount, comparison rate, remaining term, and unused privileges.

Important considerations

IRD is lender-specificA simplified rate difference may not match the contract because lenders can use different posted or comparison rates and discount treatments.

Privileges may reduce the chargeIf the contract allows a penalty-free lump sum, ask whether using it before payout is permitted and beneficial.

There may be other costsDischarge, legal, registration, appraisal, administration, and cashback-repayment amounts may be separate from the penalty.

Official sources

How to reduce prepayment penaltiesFinancial Consumer Agency of CanadaBreaking your mortgage contractFinancial Consumer Agency of Canada

Related mortgage help

Breaking a mortgageCompare the penalty and costs with the expected benefit.Fixed or variable rateCompare payment stability, rate exposure, and contract features.HELOC, refinance, or second mortgageCompare access, repayment, rates, penalties, and fees.