25 Dec 2022

Can You Pay off a Mortgage Early Without Penalty?

Pay off a Mortgage Early

Potential homeowners and borrowers who are researching and comparing the various home loan product offerings available to them may want to learn if they can pay off a mortgage early without penalty. Some types of home loans will allow a borrower to pay off their mortgage early without penalty, while others will unfortunately result in penalties if the borrower pays their mortgage off early. 

Variable-rate mortgages are a type of home loan with an interest-rate that fluctuates over the life of the loan. This type of home loan can allow borrowers to pay off a mortgage early without penalty because of the risks the fluctuating interest rate can pose to both the home loan lender and borrower. If a borrower chooses to pay off their variable-rate mortgage early, they will not incur penalties or be required to pay various fees and charges for paying off the mortgage before the end of it’s terms. 

Fixed-rate mortgages are a type of home loan that is a contract between the borrower and their home loan lender as well as the home loan lender and a wholesaler. The home loan lender borrowers funds from the wholesaler at a fixed price in order to give the borrower a fixed-rate. Should the home loan lender break the contract, they will incur a fee from the wholesaler. If a borrower pays off their mortgage early, they will incur break cost fees. 

To learn more about variable and fixed-rate mortgages, reach out to the Mortgage House team of professional home loan lenders for further information as well as specialized assistance and advice throughout the application process.

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