The downside of paying mortgages early

There are many reasons why someone may want to pay off a mortgage early, for some people the benefit lies in locking down a lower interest rate. However, early payment always comes with some form of a penalty. Common practice is that lenders will compare your interest rate to their current interest rate for the term closest to the amount of time left on your mortgage. Since there’s no rule about which rate to use, they can use any one. So what can you do to combat this? Well, if you know the annual prepayment amount for your mortgage (usually between 10% and 20% of mortgage), ask…