BMO penalty calculator
BMO Bank of Montreal mortgage penalty calculator
Short answer: BMO charges the higher of 3 months’ interest or IRD vs BMO’s posted rate for the closest term, taking your discount into account. Variable: 3 months’ interest. This calculator uses BMO’s own posted rates (read November 2, 2026; from the MITEY lender-rate dataset) to price your mortgage and shows whether breaking pays before your term ends.
Estimate what it would cost to break a BMO fixed mortgage, using BMO’s own posted rates (November 2, 2026) and the penalty rule BMO publishes. Then see whether breaking pays and how waiting cuts the cost.
BMO Bank of Montreal · estimated cost to break today
$15,461
IRD applies
BMO: higher of 3 months’ interest or the IRD against its posted rate for the closest term (2-yr posted; the higher rate on a tie), less your discount.
Moving to 5.14% would save about $7,498 in interest over the 21 months left, so you’d be $7,963 behind after the penalty. Waiting for renewal, or porting, is likely cheaper.
Break-even new rate: 4.13%. Below that, breaking pays before your current term would have ended. Ignores legal, appraisal and discharge fees. For a full refinance break-even with fees, see Revalued.ca.
Waiting cuts the penalty
If posted rates stay where they are, waiting 6 months brings the estimate to $7,752; at maturity it’s $0. Early renewal at BMO: Up to 180 days early, no penalty.
Three ways to pay less
- Prepay first. Using this year’s privilege first lowers the base the penalty is charged on (20% lump sum and 20% payment increase a year on closed mortgages; smart fixed 10% / 10%.)
- Port instead of breaking. Port a fixed closed mortgage; extra money blended at the current fixed posted rate.
- Blend and extend. FCAC describes early renewal at a blended rate as a way to avoid a full penalty. Ask BMO for a quote.
BMO’s own penalty page ↗ · always get the bank’s written payout figure.
The same mortgage at each big bank
Same balance, rate, discount and time left, priced with each bank’s own posted table (Nov 2, 2026) and the formula it publishes. This shows how much the bank’s penalty rule and posted table matter.
| Bank | Estimated penalty | 3 months’ | Compares with |
|---|---|---|---|
| RBC | $8,951 | $7,080 | 2-yr posted 5.74% |
| TD | $11,799 | $7,080 | 2-yr posted 5.39% |
| National Bank | $13,011 | $7,952 | 1- and 2-yr rates, interpolated for 21 months 5.30% |
| Scotiabank | $13,020 | $7,080 | 2-yr posted 5.24% |
| CIBC | $13,020 | $7,952 | 2-yr posted 5.24% |
| BMO | $15,461 | $7,080 | 2-yr posted 4.94% |
Estimates use simple interest over the months left (as in FCAC’s example); RBC and Scotiabank say they use a present-value basis, which lowers the real figure somewhat. For a term over five years broken after year five, the Interest Act caps the charge at 3 months’ interest, and the analyzer applies that. Today’s month is taken from your device; rates are as published on November 2, 2026.
BMO’s rule, in its own words
- Fixed closed: the higher of three months’ interest at the applicable fixed rate or an amount calculated using the interest rate differential.
- IRD: the difference between your rate and “the current posted rate charged for the mortgage similar to yours for the remaining term”, taking into account any rate discount you received.
- Comparison term: the posted term closest to the time remaining; if exactly halfway, BMO’s standard charge terms use the higher of the two posted rates.
- Variable closed: three months’ interest at the rate on the day of prepayment. In the last three months of a term the charge is the interest on the amount prepaid; terms over five years drop to three months’ interest after year five.
BMO posted rates used in the calculation
| Term | Posted rate |
|---|---|
| 1-year | 5.49% |
| 2-year | 4.94% |
| 3-year | 6.05% |
| 4-year | 5.99% |
| 5-year | 6.09% |
| 6-year | 6.29% |
| 7-year | 6.40% |
| 10-year | 6.80% |
Online estimates are a starting point. Ask BMO for a written payout statement before you sign anything with another lender, or try BMO’s own calculator.
Frequently asked questions
How does BMO calculate its mortgage prepayment penalty?
Higher of 3 months’ interest or IRD vs BMO’s posted rate for the closest term, taking your discount into account. Variable: 3 months’ interest. See the BMO profile for the bank’s exact wording and source.
Which BMO posted rate is used?
The posted rate for the term closest to the time left in your term. BMO’s posted fixed rates on November 2, 2026: 1-year 5.49%, 2-year 4.94%, 3-year 6.05%, 4-year 5.99%, 5-year 6.09%, 6-year 6.29%, 7-year 6.40%, 10-year 6.80%.
How can I lower a BMO penalty?
Use your prepayment privilege first (20% lump sum and 20% payment increase a year on closed mortgages; smart fixed 10% / 10%.), ask about porting (port a fixed closed mortgage; extra money blended at the current fixed posted rate.), or wait: up to 180 days early, no penalty.
Sources
- Today’s mortgage rates — BMO, checked Nov 2, 2026
- Paying off your mortgage faster (prepayment privileges, prepayment charges, portability) — BMO, checked Nov 2, 2026
- Reduce or avoid prepayment penalties — FCAC, checked Oct 31, 2026
Keep exploring
Other banks: RBC · TD · Scotiabank · CIBC · National Bank
Educational information only, not financial, legal or tax advice. BankMortgages.ca is independent and is not affiliated with, endorsed by or paid by any bank named on this site. Bank terms change: confirm every rate and term with the lender and the official sources linked on each page before you act. Read the full disclaimer.
