Agreement
Charges won’t apply if you follow the rules set out in your mortgage agreement.
Open Mortgages
Prepay any amount at any time on an open mortgage without penalty.
Payment Frequency
Making payments more often means more money goes towards your principal. You'll pay off your mortgage faster without charges.
Maturity Date
If you wait to pay off your mortgage until its maturity date, you won’t pay any penalties.
Mortgage Assumption
If someone is approved to take over your mortgage, you won’t be charged any prepayment fees.
Take Advantage of our 20/20 Pay Down Option
20% of Principal
Pay up to 20% of your original mortgage principal each year without penalty on your closed mortgage.
20% Payment Increase
Increase your payment by 20% once during the term of your closed mortgage.
Additional Mortgage Prepayment Information
Prepayment charges can change without notice. They’re based on factors such as:
- Interest rates, and as they change, so can penalties based on Interest Rate Differential
- Time remaining on your mortgage term (less time means a lower penalty)
- Mortgage balance (a lower balance can help reduce prepayment charges). The balance also includes missed payments or unpaid fees.
To learn more about prepayment penalties and to see an example of a prepayment calculation, visit Financial Consumer Agency of Canada Mortgage fees: prepayment penalties.
Questions
What is a mortgage prepayment?
A mortgage prepayment is an extra payment made toward your mortgage principal, in addition to your regular scheduled payments. Because it reduces the amount you owe, it can help you pay off your mortgage faster and reduce the total interest you pay over time.
What are prepayment privileges or mortgage pay down options?
Prepayment privileges are the options your lender allows you to use to pay extra toward your mortgage without a penalty. These may include making a lump-sum payment, increasing your regular payment amount, or changing to a faster payment schedule. The exact amount and timing depend on your mortgage agreement.
At Innovation, we have a 20/20 mortgage pay down option. You can pay up to 20% of your original mortgage principal each year without penalty on your closed mortgage. Plus, you can also increase your payment by 20% once during the term of your closed mortgage.
Will I be charged a penalty for prepaying my mortgage?
You may be charged a prepayment penalty if you:
- pay more than your mortgage agreement allows,
- break your mortgage contract,
- transfer your mortgage before the end of the term, or
- pay off the full balance early.
Open mortgages allow extra payments without a penalty, while closed mortgages typically have limits.
How can mortgage prepayment save me money?
When you make an extra payment toward your principal, your balance decreases faster. Since mortgage interest is calculated on the remaining balance, reducing the principal can lower your interest costs and may shorten the time it takes to become mortgage-free.
What should I check before making a prepayment?
Before making a prepayment, review your mortgage contract or contact us to confirm your annual prepayment limit, when payments are allowed, whether unused privileges carry forward, and whether any penalties or fees may apply. It is also a good idea to make sure you still have enough savings available for emergencies.