Interest Rate Differential (IRD) The IRD is a compensation charge that may apply if you pay off your mortgage prior to the maturity date, or pay the mortgage principal down beyond the amount of your prepayment privileges. The IRD is based on: The amount you are pre-paying; and, BMO Harris Bank disclaims any liability arising out of your use of, or any action taken in reliance on, any such information. Always consult an attorney or tax professional regarding your specific legal or tax situation. Calculators are provided by Leadfusion. Leadfusion is not affiliated with BMO Harris Bank N.A. The result assumes a simple interest rate calculation and that interest payments have not been reinvested. Please confirm rates and results by calling BMO Bank of Montreal Direct Banking at 1-888-771-0123. “If you have a fixed rate mortgage, the penalty is the higher of three months interest and the Interest Rate Differential Calculation” So, on the interest rate side, you take your current rate of 3.1% less the three-year rate of the bank that you chose, 2.6%, you create a difference of 0.5%. 1 Calculators are provided by Leadfusion, Inc., which is not affiliated with BMO Harris Bank N.A. The results and information provided on this website are estimates and are provided for informational purposes only. Results depend on many factors, including the assumptions you provide. BMO Harris Bank disclaims any liability arising out of your use of, or any action taken in reliance on, any such information. Always consult an attorney or tax professional regarding your specific legal or tax situation. Calculators are provided by Leadfusion. Leadfusion is not affiliated with BMO Harris Bank N.A. When calculating the IRD differential the lender will use the posted interest rate at the time you obtain your mortgage and not the current posted rate. Most consumers obtain their mortgages at discounted rates and do not readily know the posted rate of the lender at the time they obtained their mortgage. This IRD calculation is only to be used as a guide to understand the calculation.
APR - What is it? An easy to use IRD Calculator Interest Rate Differential (IRD) · IRD / Discount Were you a BMO Bank Of Montreal Mortgage Customer? Dec 9, 2019 With lower mortgage interest rates, many Canadians are wondering: should I Wealthsimple Review · Nest Wealth Review · BMO SmartFolio Review In that situation, the calculator shows your prepayment fee would be approximately $12,930. This amount is called the interest rate differential (IRD).
When calculating the IRD differential the lender will use the posted interest rate at the time you obtain your mortgage and not the current posted rate. Most consumers obtain their mortgages at discounted rates and do not readily know the posted rate of the lender at the time they obtained their mortgage. This IRD calculation is only to be used as a guide to understand the calculation. A fixed-rate mortgage penalty is calculated using either the interest rate differential, which is the difference between your original interest rate and the current interest rate charged if the lender was loaning the funds out today for the rest of the term, or three month’s worth of interest - whichever is higher. Interest Rate Differential. With the interest rate differential, TD would look at the difference between two interest rates, how many months you had left to pay off your current mortgage term, and finds the amount of interest they would lose by letting you break your term early. But here’s where things get tricky. Most lenders will charge the greater of IRD (Interest Rate Differential) or 3 months interest penalties. The calculator below will explain these two types of potential penalties and summarize the type and magnitude of the penalty which will likely be applicable to your mortgage.
Our prepayment calculator can help you find an estimated penalty cost when paying off or refinancing your mortgage before What is interest rate differential?
Jan 23, 2018 Toilet Paper Cost Calculator I have an existing mortgage of $260k with BMO at 2.59% with 2 years left on the term. If the bank tries to screw me on the rate, I could pay the fee (3 months interest) and then proceed with using a Paying the fee hurts, but depending on the rate differential it may offer me Better Outcomes. presented by BMO Global Asset Management. I'm Ben Please share your insights with us at bmogam.com/betterconversations.” It's hard to