What it costs to break your mortgage early.
Refinancing, selling, or switching before your term ends usually triggers a penalty — and on a fixed mortgage the IRD can be large. Estimate it before you decide.
Fixed penalties are the greater of three months' interest or the IRD. Variable penalties are typically just three months' interest.
Real IRD penalties are often calculated against the lender's posted rate at origination (not your discounted rate), which can make them much larger than a simple estimate. Some lenders also use different formulas. Always get your exact penalty in writing from your lender before making a decision — then run the break-even against the rate you'd move to.
Get the exact penalty, then decide.
A licensed mortgage professional pulls your real penalty from the lender and runs the break-even against today's rates — so you only break if it genuinely puts you ahead.
- Pulls your exact penalty, not an estimate
- Runs the break-even for you
Illustrative estimate only. The IRD here is a simplified calculation on your stated rates; your lender's actual penalty may use posted rates and a different formula, and can be substantially higher. Confirm your exact figure with your lender before acting. Not an offer of credit.