# Break 10 Year Fixed Mortage



## Pennywisdom82 (Jan 4, 2018)

In early June of this year, I will have reached the 5 year mark in my 10 year fixed mortgage. I'm looking to break it and refinance (After 5 years, the penalty is no more than 3 months interest (approx $2500 for me). Is there a chance the lender will let me break it early (1 month or 2?) while still allowing just a 3 month interest penalty? Currently, the penalty for me is about 15,000 to break.


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## Spudd (Oct 11, 2011)

The only way to know this is to ask your lender.


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## Mortgage u/w (Feb 6, 2014)

Not likely.
But shouldn't you be asking your lender instead??


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## dougbos (Jun 4, 2012)

Only your lender can tell you for sure. I doubt they will say yes as they have a legal contract with you and they will lose $12500 if they let you out of it early. If they were to allow this make sure that it is in writing.


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## redsgomarching (Mar 6, 2016)

think about this if you were on the opposite end. 

would you consider losing out on 15000 if it meant your business, your family, your food on the line? 

be sensible.


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## OhGreatGuru (May 24, 2009)

a) Are you sure it is only 3 mos interest? Most mortgages have changed to "The higher of" 3 months' interest of the Interest Rate Differential (IRD). 
b) Only your lender can tell you if it is permitted, and what the penalty will be.
c) Why would they let you do it if it is going to cost them money, unless your contract clearly provides for it? They might let you do it if you were refinancing with them at higher rate. 

I am confused. You say you are only 5 years into a 10-year mortgage, but are talking about breaking it only 1 or 2 months early. How can that be? Or is this a 10-year amortization, but only a 5-year term?


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## fireseeker (Jul 24, 2017)

OhGreatGuru said:


> a) Are you sure it is only 3 mos interest? Most mortgages have changed to "The higher of" 3 months' interest of the Interest Rate Differential (IRD).


_The federal Interest Act prohibits IRD penalties on terms over five years, after five years have elapsed. In such cases, a maximum three months’ interest penalty may apply.
_
https://www.thestar.com/business/personal_finance/spending_saving/2012/04/01/breaking_your_mortgage_know_the_rules.html


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