How is a prepayment charge calculated?
For a variable rate closed mortgage (including Homeowner ReadiLine® variable rate closed installments), the prepayment charge will be equal to three months' interest calculated at the interest rate applicable to the mortgage on the day of prepayment.
For a fixed rate closed mortgage (including Homeowner ReadiLine fixed rate closed installments), and the low-rate fixed closed mortgage if you are selling your property or refinancing into another BMO mortgage, the prepayment charge will be the higher of three months' interest calculated at the applicable fixed interest rate or an amount calculated using interest rate differential (IRD). However, if the term is greater than five years and you prepay after the 5th year, the prepayment charge will be equal to three months' interest.