If your mortgage contract still has several years left, you might feel trapped. Whether you're considering refinancing, transferring your mortgage, or renewing early, penalties can add up to thousands of dollars. But here’s the good news: there are smart strategies to reduce those costs and regain control of your loan.

Before breaking your contract, check the prepayment clauses. Most lenders allow additional payments without penalty—typically between 10% and 25% of your balance. For example, if your balance is $300,000, you may be able to make a $30,000 prepayment penalty-free. If you're close to your mortgage anniversary, you might even double that amount with two consecutive payments.

Tip: Don’t wait for your lender to offer this option—take the initiative!

Does your contract include a portability clause? If so, you may be able to move your mortgage to a new home without penalty. Even if it doesn’t, you can negotiate with your lender. Be strategic and proactive.

In some cases, your mortgage can be transferred to the buyer of your property. But be cautious—you remain responsible for the loan. This option requires careful evaluation with your broker.

If you need to refinance for renovations or other reasons, you can blend the penalty into a new rate. This can be beneficial if you secure a better rate over a new 5-year term. However, this option depends on your lender’s flexibility and may limit your ability to negotiate rates.

Protect yourself from rising rates by reserving your next mortgage rate 90 to 120 days before your term ends. If rates drop, your broker can adjust your file just before signing with the notary.

Our mortgage brokers are here to guide you through these options and help you make the best decision. Even with penalties, a transfer or refinance might still be worthwhile. All it takes is a thorough analysis—and we’d be happy to do that for you!