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.

It depends what your mortgage deed says. In Quebec most bank use the differential interest rate, and since i work in a notary office, I seen people either refinancing or selling their properties, paid huge amounts of penalty. If you are selling to buy another property you may negotiate with the bank the penalty, if you want to stay with same bank. I usually tell clients, to communicate with the person at the bank also by email: an email coming from the bank....paper trails are great!! Before you decide to sell or to refinance, get the bank to tell you exactly how much your penalty will be....get it by email also.!!! Get a *payout only for information*

ON Canada - get a one year open mortgage