Newly launched Prepayment Penalty Mentor can help borrowers capitalize on the golden opportunity of falling rates.
It also equips brokers with the insights they need to help their clients make smarter decisions about breaking or paying off their fixed-rate mortgage early.
Shedding light on hidden prepayment costs
The tool uses deep historical data rates, lender contract and policy tracking, and forward projection for the majority of lenders to provide an accurate picture of the prepayment fees in their mortgage contract. That allows them to compare their existing terms against available alternatives, while accounting for the penalties they’d incur for making the switch.
“If I as a broker want to understand the penalty that my client has to incur in order to potentially save money, I typically have to ask the branch to get that information, and I risk losing the client,” says LenderKey CEO Christopher Darwiche, who was involved in the development of the project. “This is a tool that allows me to continue adding value to my client without exposing them to the threat of losing them to the lender in the retail channel.”
Darwiche explains that lenders only have a voluntary requirement to make simplified penalty information readily available on their website — and many still require a phone call — but there was previously no tool that offered prepayment penalty information across lenders.
“Bringing that transparency to brokers so that they can now have better conversations creates a more democratic experience for mortgage options, so I don’t have this secret mortgage penalty I don’t know about that, at the last minute, forces me to stay with my lender,” explains mortgage broker and Vine Group founding partner Hugo Dos Reis.
The tool came together as a side project among a group of brokers and industry professionals at the MPC National Conference in Vancouver in October 2022. There, broker and now CEO of Prepayment Penalty Mentor, Matt Imhoff, hosted a breakout session on prepayment penalties.
“Neil Bartlett and Matt took the conversation even further, leading to a collaboration,” explains Darwiche.
Bartlett, a seasoned executive with experience as Senior Vice President at both RBC and Scotiabank, was intrigued by the challenge and the opportunity to help consumers financially.
Bartlett is also an accomplished author of three books on software development and a recognized leader in risk analytics within the financial industry. He played a key executive role at a company acquired by IBM for USD $345 million, and later received the company’s highest distinction, being named an IBM Fellow in 2013.
“This has been over two years of Matt and ourselves working together to finally get to where we are today and start delivering a product that we’re pretty proud of,” Darwiche added.
Brokers who have tested the tool are calling it a “game-changer.” Mortgage broker Chris Kolinski ran multiple mortgages through it and found savings across the board.
“This tool is a goldmine—especially if you’ve got a lot of 3-year fixed deals from the past couple of years,” he said. “We all know there’s money sitting in our databases… this is an easy way to find it.”
A well-timed solution
Prepayment Penalty Mentor happens to be hitting the market at an opportune time. As fixed mortgage rates continue to fall, there could be significant advantages for those looking to switch, pay off, or break a fixed-rate mortgage.
“Customers are now thinking, ‘you know that 5.2% that I locked into a year ago? I can do better now,’” explains Darwiche. “Because Matt and the team are giving insights to our users, you can now go into the tool, run the math, and call the client with a better deal.”
Darwiche says one user recently helped a client save $6,800 and reduce their mortgage amortization by 39 months — for a total savings of about $50,000 over the life of their mortgage — by buying out their current mortgage and switching to a product with more favourable terms.
“We just went through the rollercoaster with rates going up then coming down, and on the downward trend — rather than getting stuck or waiting it out — we can be proactive, reach out to customers, and give them advice,” Darwiche adds. “There is no role in any bank where their job is to proactively call the customer and say, ‘you should break your mortgage, pay the penalty, and then either stay here or go to a competitor and get a little extra savings,’ but a broker can do that.”
Forecasting future penalties
Not only can the tool offer borrowers data about the prepayment penalties associated with their existing lender, but it can also help them compare terms across providers, including A and B lenders, credit unions and monoline lenders.
“What we do, in addition to that, is we help the broker — and the end consumer — understand what the penalty will be in the future,” Darwiche explains. “That’s something that no one’s doing today; they’ll tell you what the penalty is today, and maybe next week, but if you want to know what the penalty is six months from now, you have to call back in five months and three weeks.”
With posted rates and penalty quotes changing frequently, brokers typically can’t offer advice on where fees may go in the future. That information, however, could be vital for clients looking to change their housing situation or plan around major life events.
“I was the second person to know that one of my clients was planning on getting divorced. Why? Because they got a penalty quote today, and realized it could change in the summer,” Darwiche says. “We mapped it out, we put together a plan for them to pay a penalty today that was less than it should be and then sit in an open mortgage at just over 6% until they ultimately sell the marital home.”
The Prepayment Penalty Mentor offers tiered pricing, with exclusive discounts for Mortgage Professionals Canada members (MPC members can easily access the discount by entering the email used to login to MPC):
- Penalty Calculator ($20/month, $10 for MPC members) – Provides penalty calculations for 50+ lenders, interactive graphs, and penalty forecasting.
- Comparison Tool ($50/month, $40 for MPC members) – Expands to 200+ lenders, offering refinance scenarios and debt consolidation insights.
- Full Package ($100/month, $90 for MPC members) – Includes the prepayment penalty dashboard, advanced analytics, training, and coaching.
Though the solution was over two years in the making, the creators behind it say this week’s launch marks a starting point, not an end.
“This is not something that we just did some research and now we’re good to go,” says Darwiche. “This is something that we’re growing and evolving and continuing to improve.”
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calculators Chris Kolinski Christopher Darwiche Hugo Dos Reis Matt Imhoff mortgage prepayments prepayment penalties prepayment penalty calculations Prepayment Penalty Mentor
Last modified: March 25, 2025