Breaking a Mortgage

« Back to Glossary Index

Breaking a mortgage is when you terminate a mortgage early before the end of the term (maturity date). A penalty generally applies to any “closed” mortgage if it is broken before maturity.

Spy Tip: You can reduce your penalty by making a prepayment prior to requesting discharge from your lender. Some brokers can even arrange short-term loans for this purpose. Note, however, that some lenders do not count prepayments made within 30 days of discharge. Know your lender’s policy if you plan to use this strategy.

« Back to Glossary Index