Great to hear from you.

What I understand is that there may be a smaller penalty if you get a different loan from the same lender, but I would check as lenders do have different policies.

Penalties are calculated based on they type of product you have (fixed or variable) and what the rate is on the product.

If you have a mortgage with a low rate and interest rates in the market are high, your penalty might be quite low.

If rates are low and you have a mortgage with a high interest rate the lender my hit with you an Interest Rate Differential (see the link in the original post) that can be very expensive.

I just bought a property and got a variable rate mortgage at prime minus .05. I did this because I plan on paying it down quickly and can save a lot on interest compared to a fixed rate product.

One of the risks of a variable rate mortgage is that rates can go up which will increase your mortgage payments or the amount of interest you pay. If you’re going for a variable rate mortgage, make sure you can afford higher the payments comfortably or are OK with paying more interest.

What are your thoughts?

Thanks…What about if refinancing a mortgage and to do that taking your mortgage to a different bank or lender? Is the penalty calculated in the same way? Are there rules about how penalties are calculated?

What if any are the dangers of getting a mortgage with a low variable interest rate?…

Thanks!