Glossary · Financing
What is Prepayment penalty?
A prepayment penalty is a fee charged for paying off or breaking a mortgage earlier than your contract allows.
Definition
Mortgages often limit how much extra you can pay each year. Going beyond that, or breaking your mortgage to refinance or sell, can trigger a penalty — sometimes a few months' interest or a larger calculated amount.
Knowing your prepayment terms helps you avoid surprises and decide whether refinancing or an early payoff is worth it.
When prepayment penalty matters
- Deciding whether to refinance early
- Planning extra payments within your limits
- Selling before your term ends
With Homeprint
How Homeprint helps with prepayment penalty
Homeprint keeps your mortgage terms handy so you understand your prepayment privileges and penalties.
- Keep every related document in one secure place
- Track your home's value and finances over time
- Stay connected with trusted neighbourhood experts
Prepayment penalty — FAQ
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