Interest Rate Differential (IRD)

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The Interest Rate Differential is a compensation charge for the early termination of a mortgage prior to its maturity date. IRDs apply to fixed rate mortgages.

The IRD is based on the difference between your rate and the rate the lender can lend at today, for a term equivalent to your remaining term. The more your rate is above today’s rates, the higher the IRD charge. Some lenders, like the major banks, are notorious for having relatively high IRD penalties.

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