Can I break my mortgage early without penalty?
Quick Answer
Short answer: Most mortgages allow 10–20% annual prepayment; breaking entirely triggers penalties.
Detailed Explanation
Standard mortgages let you prepay 10–20% of the original balance annually without penalty, plus increase payments by 10–20%. Beyond that, penalties kick in.
Fixed-rate penalties: Greater of three months' interest or Interest Rate Differential (IRD). Variable-rate penalties: Typically three months' interest only.
- IRD penalties can be massive when rates have fallen
- Porting to a new property may avoid penalties
- Read prepayment privileges carefully—they vary widely
Disclaimer: This page is for general information only and does not constitute legal, financial, or real estate advice. Always verify details with a licensed Alberta REALTOR®, mortgage professional, or lawyer before making decisions. Buy in Edmonton assumes no liability for actions taken based on this content.
Tim Grover, RE/MAX Excellence • 780-288-5144 • 5607 199 Street NW, Edmonton, AB
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