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Fixed rate mortgages typically carry a pre-payment penalty which is either 3 months interest penalty or an Interest Rate Differential whichever is higher. There is typically no IRD penalty on Variable Rate Mortgages.

An Interest Rate Differential (IRD) amount is a compensation charge that may apply if you pay off your mortgage principal prior to the maturity date or pay the mortgage principal down beyond the prepayment privilege amount. The IRD amount is calculated on the amount being prepaid using an interest rate equal to the difference between your existing mortgage interest rate and the interest rate that lenders can now charge when re-lending the funds for the remaining term of the mortgage.