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2. Can I port that mortgage? Let’s say you have to sell your home, can that mortgage be transferred to the next property you buy?

3. Are you tied to that bank you signed your mortgage with forever? Some mortgages cannot be broken unless you sell your home.

4. What are the prepayment terms on your mortgage? Large prepayment terms will allow you to pay a lump sum on your mortgage, thereby lowering the penalty for breaking any term left.

5. How will the interest rate differential penalty be calculated? This may be the most important factor. If the bank uses the qualifying rate or posted rate to calculate any penalty, it will cost you a bundle.

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He said even though his new mortgage was at a better rate, the penalty in the end was much higher than any savings.

“I involved the bank head office, the ombudsman, the government, all to no avail,” he says. “Always find out the penalty info should you sell before the term is up before you sign on the dotted line. I found out the hard way.”

Mr. Hurman, who now says he is a renter, laments he couldn’t even write off the charge against his taxable income

Breaking a mortgage is not a minor issue when you consider 9% of borrowers end up refinancing their mortgage before the term is up, according to the Canadian Association of Accredited Mortgage Professionals.

Laura Parsons, the Calgary area manager for mortgage specialists with Bank of Montreal, said the penalties are key.

“You really have to understand what they are,” said Ms. Parsons, who agrees that a lot of people do not. “There is a responsibility of clients to read their documents but also for the lawyers to explain all the terms and conditions.”