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Originally Posted by MillerTime GFG
Yep, the lowest rate I have access to also has great pre-payment privileges...20% lump sum/annum & 20% increase in payment/annum.
The penalty for breaking the mortgage early is 3% of your mortgage balance. If you return to that same lender within 60 days (might be 30), they will "normalize" the penalty, by reducing it to a standard IRD/3 month's interest charge. That's the part that people really need to be aware of.
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My concern with those high penalties is what position it puts you in when you renegotiate. They know that if you don't sign your new mortgage with them you will owe 12 months interest penalty so why would they offer you a good rate?