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.
What is Innovation's 20/20 Mortgage 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.
Frequently Asked Questions About Mortgage Prepayment Charges
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.
How do prepayment penalties work if I refinance or pay off my mortgage early?
With an open mortgage, you can prepay any amount at any time without charges.
On closed mortgages, a prepayment charge may apply. It's based on your rate, your balance, and the time left in your term. Innovation closed mortgages also come with our 20/20 pay-down privilege. You can prepay up to 20% of your original principal each year and/or increase your regular payment by up to 20%, penalty-free.
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.
Is switching lenders worth it at mortgage renewal?
Often, yes. Renewal is the easiest moment to move your mortgage. A better rate and flexible terms can usually offset transfer fees. If your balance and amortization stay the same, a straight switch also means no new stress test.