Quote:
Originally Posted by speede5
What conditions would be in place to end up with such a large penalty?
I played with the RBC calculator with multiple scenarios and never got hit with more than 3 months interest.
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IRD generally applies when in a low interest rate environment. In a rising interest rate environment (like today), it can often be a 3-month interest charge. Basically, the lender is getting to take your money at a lower rate, and now get a higher return on today's rates - so less penalty. If the lender has to take your money and now lend it out at a lower rate, then you get dinged.
