Mortgage penalty by lender / BMO
BMO mortgage penalty calculator
If your mortgage is with BMO and you are thinking about breaking it early, this page sets out how BMO describes its prepayment charge and lets you estimate the penalty for your own numbers. It is an estimate based on the information you enter. Only BMO can give you the actual figure.
MortgageSkip is independent and is not affiliated with, endorsed by, or acting for BMO. Lender details summarised from BMO’s own published information, last reviewed September 28, 2026.
BMO at a glance
- Fixed-rate closed mortgages
- The higher of three months' interest at the fixed rate and an amount calculated using the interest rate differential (IRD).
- Variable-rate closed mortgages
- Three months' interest at the mortgage's interest rate on the day of prepayment.
- Annual prepayment privileges
- BMO describes two sets of limits. For its smart fixed closed mortgages: lump sums of up to 10% of the original mortgage amount each calendar year, and one payment increase of up to 10% of the current payment each calendar year. For its other closed mortgages: up to 20% and 20%. Prepayments within these limits generally carry no charge; amounts above them usually do. Products differ, so you may wish to confirm yours.
- Online penalty calculator
- BMO publishes its own prepayment charge calculator, which is the more authoritative estimate for an existing BMO mortgage. Open BMO’s calculator.
Estimate a BMO penalty
The calculator below is pre-set to the way BMO measures a fixed-rate penalty. Nothing you enter leaves your browser. The result is an estimate, not a quote.
Mode
Enter just the essentials. We'll fill in the rest.
Your current mortgage
Pre-set for BMO, based on how it describes its prepayment charge. You can change it if your contract says otherwise.
Using a posted rate of 6.05% for the 3.0 years you have left, less a discount of 1.84 points worked out from your start date and rate. Posted rates are the big-bank average published by the Bank of Canada, 2026-09-23; your own bank’s may differ.
Minimum savings threshold
Only flag breaking as worthwhile if savings exceed this. Breaking involves legal fees and paperwork, so small savings may not be worth the effort.
Your break analysis
Technically yes — but below your savings threshold
Savings of $14,031 — below your $15,000 threshold
Breaking now would save about $14,031, which is less than the $15,000 you said would make it worth the effort. After legal fees and paperwork it may not be worth your time.
What to consider
Your payment drops by roughly $398 per payment.
Over the comparison window you pay $14,338 less, but owe $307 more at the end.
Estimated break penalty
IRD $9,291 vs 3-month interest $6,745 — IRD applied
IRD measured against 4.21%: posted rate less your original discount, the bank method
Measured the other way the IRD would be $14,798. Lenders differ, and only a payout statement settles it.
$9,291
If you stay
If you break
Balance detail at break date
Penalty uses the Canadian semi-annual compounding standard. Actual lender penalties vary by contract and only your lender can give you a real payout figure.
For informational purposes only — consult a licensed mortgage professional before deciding.
How BMO measures the penalty
BMO describes the fixed-rate charge as the higher of three months' interest and an amount calculated using the interest rate differential. The comparison rate is the fixed rate BMO currently charges for a mortgage similar to yours for the remaining term, reduced by any rate discount you received. For terms longer than five years, BMO describes the charge after the fifth year as three months' interest. For a variable-rate closed mortgage, BMO describes three months' interest.
In the calculator this is the "big bank or credit union" setting: the interest rate differential is measured against a posted rate for the time left, less the discount you were given when you signed. The calculator uses the Bank of Canada's average big-bank posted rates, and BMO's own posted rates may differ, which is one reason your figure may not match.
Every mortgage contract sets its own terms, and older or specialty products can differ from what a lender publishes today. If the scenario looks worth exploring, you may wish to ask BMO for a payout statement, which is the figure that counts.
Source: BMO, Your mortgage prepayment options. Reviewed September 28, 2026. If something here has changed, we would like to hear about it through the contact page.
Questions about a BMO penalty
- How does BMO calculate its mortgage prepayment penalty?
- For a fixed-rate closed mortgage, BMO describes the charge as: the higher of three months' interest at the fixed rate and an amount calculated using the interest rate differential (IRD). The IRD is measured against BMO's posted rate, adjusted for the discount you received when you signed. Your mortgage contract governs, and only BMO can give you the actual figure.
- What is the penalty for breaking a BMO variable-rate mortgage?
- BMO describes the charge on a variable-rate closed mortgage as: three months' interest at the mortgage's interest rate on the day of prepayment. On a $400,000 balance at 5%, three months' interest is about $5,000.
- How much can I prepay on a BMO mortgage without a penalty?
- BMO describes two sets of limits. For its smart fixed closed mortgages: lump sums of up to 10% of the original mortgage amount each calendar year, and one payment increase of up to 10% of the current payment each calendar year. For its other closed mortgages: up to 20% and 20%. Amounts above these limits usually carry a prepayment charge. Privileges differ by product, so you may wish to confirm yours in your mortgage documents.
- Does BMO have its own mortgage penalty calculator?
- Yes. BMO publishes a prepayment charge calculator on its website. For an existing BMO mortgage it is a more authoritative estimate than a general calculator like this one, and a payout statement from BMO is the figure that counts.
- Why might BMO's figure differ from this estimate?
- This calculator uses the Bank of Canada's average big-bank posted rates and the numbers you enter. BMO's own rates, the exact term it compares against, how it counts the days remaining, and any fees can all change the result. These figures are estimates based on the information entered. MortgageSkip is not affiliated with BMO.