1. You need to know what the penalties will be before you even sign a mortgage. You may tell yourself you have no plans to break that mortgage, but surveys says 9% of Canadians refinance before the term is up.
2. Can I port that mortgage? Let’s say you have to sell your home, can that mortgage be transferred to the next property you buy?
3. Are you tied to that bank you signed your mortgage with forever? Some mortgages cannot be broken unless you sell your home.
4. What are the prepayment terms on your mortgage? Large prepayment terms will allow you to pay a lump sum on your mortgage, thereby lowering the penalty for breaking any term left.
5. How will the interest rate differential penalty be calculated? This may be the most important factor. If the bank uses the qualifying rate or posted rate to calculate any penalty, it will cost you a bundle.

Call me first to review the pros and cons of breaking your current mortgage.