Mortgage Prepayment Calculator
Making prepayments can mean you pay less interest over the lifetime of your mortgage, or term portion on your Home Equity Line of Credit (HELOC) or TD Home Equity FlexLine. But depending on the terms, you may pay a prepayment charge.
Our calculator can help you calculate your prepayment charge so you can understand the costs of making prepayments or breaking your term early.
What is a mortgage or term portion prepayment charge?
First, let’s start with the basics: What is a mortgage or term portion prepayment? Essentially any amount you put toward your principal balance that’s above and beyond your regularly scheduled payments.
Your mortgage or term portion comes with prepayment privileges, which allow you to pay a certain amount on top of your regular payments without a charge. Pretty great, right? The exact amount you can prepay depends on the terms of your agreement.
There are a couple of types of prepayment privileges:
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Lump sum payments: Each calendar year, you can prepay up to 15% of your original mortgage balance. As an example, a 15% lump sum privilege on a $250,000 mortgage means you can pay up to an additional $37,500 per year without a charge.
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Increase your payment: This type of privilege allows you to increase your principal and interest payment as often as you like without a charge—as long as you don't exceed 100% of your original payment. As an example, let's say your monthly payment is $1,000, and you get a pay raise and have room in your budget to pay more each month. In this case, you can pay up to $2,000 during your term.
Check out our flexible mortgage features to learn more about prepayment privileges.
Prepayments can be a great way to pay off your mortgage faster and accrue less interest in the long run — but if you pay more than your payment privilege allows you may have to pay a prepayment charge. For instance, a prepayment charge will apply if you:
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Switch to another lender and pay out your mortgage or term portion with TD before the term ends.
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If your mortgage or term portion is closed to prepayment and you pay more than 15% of your original balance in a given year through lump sum payments.
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Pay out your mortgage or term portion before the term ends.
How much does a mortgage prepayment charge cost?
Great question. Understanding your prepayment costs can help you make smart financial decisions, like whether you should pay off your mortgage or term portion early.
If you have a closed fixed rate mortgage or term portion, your charge will be the higher of two numbers: either three months of interest or something called the interest rate differential (IRD) amount. The IRD amount is calculated based on the difference between the principal amount you owe at the time of the prepayment and the principal you would owe using the posted interest rate for a similar mortgage, minus any rate discount you received.
If you have a closed variable rate mortgage or term portion, you don’t have to worry about the IRD amount. Your prepayment charge will be three months' worth of interest. Check your agreement for more information on prepayment charges.
If you have an open fixed or variable rate mortgage or term portion, there's no charge for prepaying any amount.
Still with us? We know calculating prepayment charges can feel overwhelming on your own. Our Mortgage Specialists can help break it all down so you can understand your exact prepayment costs and make the financial choice that’s right for you.
What kind of prepayment do you want to make?
What information do I need to complete the calculation?
The following will help you to complete this calculator:
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If you have a mortgage:
- Mortgage Loan Agreement or Mortgage Commitment
- Mortgage Renewal Agreement
- Annual Mortgage Statement
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If you have a Home Equity Line of Credit or TD Home Equity FlexLine:
- Amending Agreement to Line of Credit Agreement Real Estate Secured
- Home Equity Line of Credit Fixed Rate Portion Renewal Agreement
- Amending Agreement to Home Equity Line of Credit Agreement Term Portion – Fixed/Variable Rate
- TD Home Equity FlexLine Term Portion – Fixed/Variable Rate Renewal Agreement
Let's calculate what you're prepayment charge may be.
What is a prepayment charge?
If you pay off your outstanding balance before your term's maturity date, or pay an amount greater than your allowable prepayment privileges, you may have to pay a prepayment charge, depending on the terms of your mortgage or HELOC/TD Home Equity FlexLine.
If the term of the mortgage loan is open, you can prepay in part or in full with no prepayment charge.
Let's calculate what your prepayment charge may be.
What do you currently have?
Is there a way to avoid prepayment charges?
Whether you're paying off your balance in full because you are moving, or simply paying down your principal amount sooner, TD gives you a number of options for prepaying without paying prepayment charges.
Make prepayments within your prepayment privileges
Make one or more prepayments up to a total of 15% of the original principal amount every year, if your term is closed.
What is your current interest rate?
How are prepayment charges calculated?
For Closed Variable Interest Rate Mortgages, this charge is calculated as a three months interest amount.
For Closed Fixed Interest Rate Mortgages and Home Equity Lines of Credit with fixed rate portions and TD Home Equity FlexLines with a Term-Portion-Fixed Rate, the prepayment charge is the greater of either:
- The three months interest amount, or
- an Interest Rate Differential (IRD) amount. The IRD amount is the difference between the principal amount you owe at the time of prepayment and the principal amount you would owe using a similar mortgage rate. A similar mortgage is one we offer today with a term that is closest to the remaining term of your mortgage loan. The similar mortgage rate is the interest rate for a similar mortgage minus any rate discount you received for your mortgage loan.
If the term of the mortgage loan is open, you can prepay in part or in full with no prepayment charge.
What is the outstanding balance?
Where can I find this information?
For information on your current product, please login to EasyWeb or call 1-800-281-8031.
What is the current term for your product?
What is a term?
A mortgage term is the length of time that the mortgage agreement at your agreed interest rate is in effect. After the term expires, the balance of the principal owing on the mortgage can be repaid or renewed at the current interest rates.
What is your maturity date?
Please enter the maturity date for your product.
What is the maturity date?
Your maturity date is the last day of the term of the current mortgage agreement.
Enter your rate discount
To obtain your rate discount please refer to your Mortgage Loan Agreement or HELOC/TD Home Equity FlexLine documents or one of the other sources listed below
If you do not have access to these documents we have estimated the discount to be: {{calculator.mortgage.preRateDiscount}}% based on the date the product funded.
What is the estimated rate discount?
If you have ported your mortgage during the term our estimated rate discount may not be accurate for your situation, please refer to one of the sources listed below.
Rate discount = TD's Posted Rate for the Term you selected at the time you obtained your mortgage - The Mortgage Rate you got for your mortgage.
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For the most accurate result please enter your personal rate discount. Your discount can be found on your:
- Mortgage Loan Agreement or Mortgage Commitment
- Mortgage Renewal Agreement
- Annual Mortgage Statement
- Amending Agreement to Line of Credit Agreement Real Estate Secured
- Home Equity Line of Credit Fixed Rate Portion Renewal Agreement
Alternatively you can call us at 1-800-281-8031 where a mortgage specialist can provide you with your rate discount.
Do you have a CashBack Mortgage?
If I received cash back, is it used in the calculation?
No the CashBack amount is not included in your prepayment charge, however, the pro-rated CashBack amount must be repaid.
Your estimated prepayment charge is {{calculator.payment.total | currency:'$':2}}*
How did we calculate this charge?
Your prepayment charge is based on:
You want to prepay the remaining balance of {{calculator.mortgage.payment | currency:'$':0}}
You have a {{calculator.mortgage.rate}}% mortgage rate
What's included in your prepayment charge?
Here's how we calculated your estimated prepayment charge, based on the information you gave us:
In the estimate, we take the annual interest rate of a current mortgage similar to yours and applied your existing rate discount.
Then we found the difference between your annual interest rate and the similar mortgage rate.
Next, we took the difference between rates and multiplied it with your prepayment amount.
We took your annual interest and multiplied it by the number of months remaining on your mortgage term. Then we divided it by 12 months to estimate your prepayment charge.
You want to prepay {{calculator.portion | currency:'$':0}}
Your current interest rate is {{calculator.mortgage.rate}}%
Your current mortgage rate is {{calculator.mortgage.rate}}%
What's included in your prepayment charge?
Here's how we calculated your estimated prepayment charge, based on the information you gave us:
Your estimated cashback charge is {{calculator.cashback.payment | currency:'$':2}}
It's important to note that additional fee(s) may be charged when making a prepayment or discharging your mortgage. These fees may include:
- A Discharge Fee
- A Reinvestment Fee
- An Assignment Fee
This is an administration fee for preparing the discharge request
This applies if you prepay your mortgage in full during the first term (e.g., you never renewed your mortgage)
This applies if you request to assign your mortgage to another financial institution
Please note provincial registration fees may apply as well.
*The Mortgage Prepayment Calculator is for an estimate only.