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Mortgage Prepayment; Know Your Options. Smart mortgage decisions start here
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Mortgage prepayment refers to paying more than the regular mortgage payments you have agreed to pay in your mortgage contract. If your mortgage gives you prepayment privileges, you can save thousands of dollars in interest charges by paying down your mortgage faster. However, if you have a closed mortgage, your lender will generally require you to pay a charge to make a prepayment that is more than your privileges allow. Prepayment charges can be costly, so it is important to know when they can apply and how they are calculated. Prepayment charges are sometimes called penalties or breakage costs.
Author: FCAC - Financial Consumer Agency of Canada
Topic: Consumer protection
Publisher: FCAC - Financial Consumer Agency of Canada
Location: Canada
Format: Guide
Content Type: Tools
Publication Date: October 31, 2012