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It’s the type of break that could cause you more pain than you imagined.

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Negotiating a mortgage is a bit different than haggling in a souk, but just barely. Danielle Kubes





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Breaking your mortgage can be a costly exercise, sometimes saving you money because you find your way into a cheaper product, but often an expensive decision necessitated by outside circumstances.

Tyler Bollhorn, who thinks of himself as sophisticated when it comes to personal finance and has written a book on investing, was shocked when he was hit with a fee of more than $150,000 to break his mortgage. He wanted to move from Kelowna, B.C., to Hawaii, but he had a home that he needed to sell, and it had a mortgage attached to it.

“I wasn’t going into a new mortgage, but I got stuck with a pretty good penalty because I never read the fine print,” says Bullhorn, who wound up paying what is called an interest rate differential penalty. “Fortunately, I made money on the sale of the house but (the penalty) was a bit of a shock. I was expecting a $30,000 penalty and I go to sign the documents at the lawyer and they say it’s $150,000 or something.”