Breaking your mortgage before the term is up can be necessary—whether you’re selling, refinancing, or needing financial flexibility. But it’s a decision that can come with costly consequences if you’re not careful. Here are five common mistakes to avoid:
1. Not Understanding the Penalties
Early mortgage breakage often triggers a prepayment penalty. Many homeowners don’t realize this can cost thousands. Penalties are usually based on either the interest rate differential (IRD) or three months’ interest—whichever is higher.
2. Overlooking the Fine Print
Your mortgage contract may include clauses that impact your ability to break it. Read it carefully or have one of our mortgage professionals review it with you to avoid surprises.
3. Assuming All Lenders Are the Same
Some lenders have more flexible breakage terms than others. If you’re considering refinancing or porting and you need help setting up a new mortgage, working with us can match you with the right lender with the flexibility you might need in the future.
4. Timing It Poorly
Breaking your mortgage close to renewal time may save you money in penalties. Similarly, if rates are dropping, it may be worth waiting a few months. Strategic timing can make a huge financial difference. We are happy to help our customers understand the ending of or renewal process.
5. Not Exploring Alternatives
From bringing your mortgage to us, to blending and extending, there may be other options that allow you to change your mortgage without the full financial hit of breaking it. Our experienced brokerage will help assess all possible routes.
Ready to Make a Change?
If you’re thinking of breaking your mortgage early, don’t go it alone. At Rampone-Marsh Mortgages, we help you understand the true costs—and find smart solutions that fit your life. Contact us today for honest, expert advice and a personalized mortgage strategy.
