1. What is TD Mortgage Penalty?

TD Bank charges either an Interest Rate Differential (IRD) penalty or 3 months' interest (whichever is higher) when you break your mortgage contract before maturity. The exact calculation depends on your mortgage type and terms.

2. How Does the Calculator Work?

The calculator estimates your potential penalty using TD Bank's standard calculation methods:

Where:

• 3 Months Interest = Mortgage Balance × Interest Rate × 0.25
• IRD = Complex calculation based on rates and remaining term

Note: This calculator provides an estimate only. Actual penalties are determined by TD Bank and may include additional factors.

3. Importance of Penalty Calculation

Details: Understanding your potential mortgage penalty helps with financial planning when considering refinancing, selling your home, or switching lenders.

4. Using the Calculator

Tips: Enter your current mortgage balance, interest rate, remaining term, and select your mortgage type. The calculator will estimate your potential penalty.

5. Frequently Asked Questions (FAQ)

Q1: How accurate is this calculator?
A: This provides an estimate only. Actual penalties are calculated by TD Bank and may differ based on specific mortgage terms.

Q2: What's the difference between fixed and variable rate penalties?
A: Fixed rate mortgages typically use IRD calculations, while variable rate mortgages usually charge 3 months' interest.

Q3: Can I avoid mortgage penalties?
A: Some options include porting your mortgage or waiting until maturity. Consult a TD mortgage specialist.

Q4: How is IRD calculated?
A: IRD compares your rate to current rates for similar terms. The exact formula is complex and bank-specific.

Q5: Are there other fees when breaking a mortgage?
A: Yes, there may be administration fees or discharge fees in addition to the penalty.