Journalism Finance - v2.0.6
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    Function getMortgagePenalty

    • Calculates the mortgage prepayment penalty.

      For variable mortgages, the penalty is typically three months of interest. For fixed mortgages, the penalty is usually the greater of three months of interest or the Interest Rate Differential (IRD).

      Parameters

      • parameters: {
            currentPostedRates: Record<number, number>;
            mortgageBalance: number;
            mortgageType: "fixed" | "variable";
            postedInterestRate: number;
            rateAdjustmentFixed: number;
            rateAdjustmentVariable: number;
            remainingMonthsToTerm: number;
        }

        The mortgage details.

        • currentPostedRates: Record<number, number>

          A record mapping term lengths (in years) to current posted interest rates.

        • mortgageBalance: number

          The current outstanding mortgage balance.

        • mortgageType: "fixed" | "variable"

          Either "fixed" or "variable".

        • postedInterestRate: number

          The original posted interest rate when the mortgage was signed.

        • rateAdjustmentFixed: number

          The adjustment applied to the fixed posted interest rate (added to the posted rate).

        • rateAdjustmentVariable: number

          The adjustment applied to the variable posted interest rate (added to the posted rate).

        • remainingMonthsToTerm: number

          Number of months left in the current mortgage term.

      Returns number

      The calculated mortgage penalty rounded to 2 decimal places.

      Error if no current posted rate is found for the remaining term length.

      const penalty = getMortgagePenalty({
        remainingMonthsToTerm: 24,
        mortgageBalance: 300000,
        postedInterestRate: 0.05,
        rateAdjustmentFixed: -0.0125,
        rateAdjustmentVariable: 0,
        currentPostedRates: { 1: 0.045, 2: 0.0475, 3: 0.05, 4: 0.0525, 5: 0.055 },
        mortgageType: "fixed",
      });

      const penalty = getMortgagePenalty({
        remainingMonthsToTerm: 36,
        mortgageBalance: 250000,
        postedInterestRate: 0.06,
        rateAdjustmentFixed: 0,
        rateAdjustmentVariable: 0.0025,
        currentPostedRates: {}, // Not used for variable
        mortgageType: "variable",
      });

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