Mortgage Prepayment

Can I pay my mortgage off faster with paying a prepayment charge? Expand/Collapse

If you currently have a Closed Mortgage, there are options available that can help you reduce your mortgage balance quicker and avoid paying prepayment penalties to the lender. Here’s how:

Consider increasing your monthly payment

You can double your existing monthly payment (increase it by 100%) therefore reducing your mortgage balance quicker and not worry about the lender charging a prepayment penalty. Certain conditions may apply, please speak to a Regional Office Account Manager to ask for details.

Make Lump-sum payments within your Prepayment Privilege

Instead of making an annual lump sum payment up to 10% of your original principal on the First and Second Anniversary Date of your mortgage, why not make 1 or more lump-sum payments up to 10% of your original principal. Keep in mind, any lump-sum payments over the 10% of your original principal will be subject to prepayment charges.

Increase your payment frequency, accelerate it

Switch to accelerated weekly or accelerated bi-weekly payments and make up to an extra month's payment every year. Accelerated weekly and accelerated bi-weekly payment options are calculated assuming there are only four weeks in a month.

The Accelerated Weekly Payment is calculated, for example, by taking your normal monthly payment and dividing it by four. Since you pay 52 weekly payments, by the end of a year you have paid the equivalent of one extra monthly payment. This additional amount accelerates your loan payoff by going directly against your loan's principal. The effect can save you thousands in interest and take years off of your mortgage.

The Accelerated Bi-weekly Payment is calculated by dividing your monthly payment by two. You then make 26 bi-weekly payments. Just like the accelerated weekly payments you are in effect paying an additional monthly payment per year.

How are prepayment charges calculated? Expand/Collapse

We have taken the confusion out of estimating prepayment charges. To proceed, you want to determine what Prepayment Privileges your existing mortgage may have, adhering to these privileges could help you avoid paying a prepayment charge altogether. Next, determine what the prepayment charges are:

Peace Hills Trust prepayment charge is 3 months’ additional interest payment if you pay more than the prepayment privilege allows.

Last, estimate your prepayment charge. Our Prepayment Penalty Calculator is simple and easy to use, just click to start. You can also use this simple step by step formula to provide you with your estimate:

How to manually estimate the 3-month Prepayment Charge: 

1st Step:

What is the amount you want to prepay on your mortgage over and above the prepayment privilege amount, if any, in your mortgage agreement?

_________ (A) 


2nd Step:

What is your Current Interest Rate expressed as a decimal? (Example: 4.55% = .0455)

_________ (B)


3rd Step:

(A) X (B) = (C)

_________ (C)


4th Step:

(C) ÷ 4 = (D)

_________ (D)

(D) = The estimated 3-month Prepayment Charge





Example: Assume a 5-year “Closed Mortgage” at an interest rate of 8.50%. The original amortization period was 25 years and there are 22 years remaining. Mortgage balance is $100,000. There are 24 months (2 Years) before the maturity date. The amount you wish to pay is over and above your prepayment privilege. Here is the estimated 3-month prepayment charge:

When would a prepayment charge apply? Expand/Collapse

Prepayment charges apply when you choose to prepay the mortgage balance before the Maturity Date on a Closed Mortgage. Choosing the right mortgage can reduce your prepayment charges or better yet, avoid a prepayment charge altogether. We provide several scenarios in which a prepayment charge may apply, including “other” fees:

Are there any other fees when paying off or paying down my mortgage? Expand/Collapse

Administration Fees that may apply if you prepay your mortgage in full include:

Mortgage Discharge Fee: Administration fee for preparing the discharge request.

Reinvestment Fee: Administration Fee if you prepay your mortgage in full during the first term (i.e. you never renewed your mortgage)

Mortgage Assignment Fee: Administration Fee if you request to assign your mortgage to another financial institution, rather than a discharge. Note: Legislation may restrict the lender from charging a Mortgage Assignment Fee in certain Provinces and Territories.

Administration Fee applicable in the above instances:

  • First Year (Within 12 Month period): $500 

  • Second Year (Within 24 Month period): $250 

  • After Two Years (After 24 Months): $0

How can I contact a Mortgage Representative to discuss payment charges? Expand/Collapse

Should you wish to speak to a Mortgage Representative regarding prepayment charges or you want to discuss your prepayment options respect of your Peace Hills Trust mortgage:

Contact a Mortgage Representative* toll-free at 1-855-428-7200

For calls from the Edmonton area or from outside Canada: 780-428-7210

*Mortgage Representatives are available from Monday to Friday, excluding statutory holidays, between 8:30 a.m. and 5:00 p.m., Mountain Time.

Alternatively, you may also visit your servicing Regional Office and speak to directly to an Account Manager.