Can I refinance out of a private mortgage early?
Updated: February 28, 2026CanadaFAQPrivate lending
Quick Summary
Usually yes, but minimum-interest and payout terms can make early repayment more expensive than you expect.
Most private mortgages can be paid out before maturity, but the real cost depends on the Commitment Letter.
Terms that matter most
- Minimum interest: you may owe a minimum number of months of interest even if you repay early.
- Prepayment Penalty or payout fee: sometimes a flat fee, sometimes months of interest.
- Legal and discharge costs: lawyer work and registration steps still apply.
Practical checklist
- Request payout estimates at 30, 60, 90, and 180 days.
- Confirm how penalties are calculated and when they end.
- Align the term and penalty structure with your exit timeline.
If your plan is to refinance out quickly, choose the loan based on total cost and flexibility, not just the headline rate.