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Is it normal to charge a penalty for breaking a mortgage term by one month

 
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Vote:
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anonymous


Is it normal to charge a penalty for breaking a mortgage term by one month?
0     In Mortgage Cont.17

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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?


    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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    Q. What kind of the mortgage does not penalty for breaking?


    ON Canada - get a one year open mortgage

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