How to Avoid Mortgage Prepayment Charges

Want to pay off your mortgage early? Learn how to avoid prepayment charges.


You want to pay off your debt sooner but don’t want to be penalized for being financially responsible. We totally understand. Here are some ways to avoid prepayment penalties on your mortgage.

Prepay what you’re allowed to

Charges won’t apply if you follow the rules set out in your mortgage agreement.

Open Mortgages

On any Innovation open mortgage, you can prepay any amount at any time without penalty!

Closed Mortgages

As an Innovation mortgage holder, you can enjoy a generous 20/20 mortgage pay down option on any closed mortgage type. Pay up to 20% of your original mortgage principal each year without penalty and/or increase your payment by 20% once during the term of your mortgage.

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.

Change your payment frequency

Making mortgage payments more often means more of your payment will go towards your principal versus the interest. Switching from monthly to bi-monthly for example, will help pay off your mortgage faster without incurring charges.

Wait until your maturity date

If you wait to pay off your mortgage until its maturity date, you won’t pay any penalties.

Have someone else assume your mortgage

If someone takes over your mortgage, you won’t be charged any prepayment fees. The new applicant would of course need to qualify for the 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.