Interest Rate Differential Amount

Most closed mortgages cannot be paid off without penalty. Typically, the penalty is calculated based on the difference between the locked-in mortgage interest rate and the current mortgage rates. So if you have three years remaining on your mortgage which is at a rate of interest of 6% and current 3-year mortgages are 5%, your Interest Rate Differential amount would be approximately 1% of your mortgage amount for 3 years.