How much penalty for porting to a lower mortgage

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anonymous

How much penalty for porting to a lower mortgage? Lina

In Mortgage Cont.19

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Q. What is ird penalty when breaking a mortgage and do banks apply this type of penalty in the mortgage contract?

"Penalty if you decide to break the mortgage with your current lender..."

IRD or Interest Rate Deferential is a formula the banks use to calculate mortgage penalty if you decide to break the mortgage with your current lender . The IRD formula is used in a case where the current posted rates are lower then your mortgage rate. This is done in order to have a bigger penalty if you are breaking your mortgage for a better rate.

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