We received the following question submitted through the web form on our contact page!
"I keep seeing references to this "mysterious law" about penalties on mortgages greater than 5 years, but no one can ever refer to it... Or more importantly, when I talk to banks, they assure me no such laws exists?
On you site you say: "By law, if the mortgage term is more than five years and more than 5 years has been paid, the mortgage holder is required calculate the penalty using the three month interest method." And I keep hearing this... but when I call government centers, nobody can confirm this law?"
Payout Penalties On Terms Greater Than 5 years
"If you pay out a mortgage with a term longer than 5 years after the first 5 years, the only thing you owe is 3 months interest." Gord McCallum
As promised in the video, click that attractive red button below to head off to the Interest Act Of Canada... you will want to scroll down to Section 10 (1) to find the subject matter.
Here are some other pages on the First Foundation site that you might find valuable.
- First Foundation Mortgage Glossary: Prepayment Privileges
- The Home Buying Process
- Mortgage Calculators
- Secure Online Mortgage Application
A lot of people submit questions through the web form on our contact page. If you have a question for us, feel free to use that page or connect with us on any of our social media sites. Here is a list of our team members if that feels more personal!
Here is a list of other questions that we have answered as part of our Social FAQs