As mortgage brokers, our job isn’t just to get clients the best rate—it’s to help them make the smartest financial decision for the long term. One of the biggest pitfalls homeowners run into is not understanding their mortgage penalty if they need to break their term early. And with rates finally trending down after years of record highs, this is more important than ever.

A while back, we had the privilege of hosting Matt Imhoff, the Prepayment Penalty Mentor, in a My Broker Pro webinar with Sarah Mathieu. During that session, Matt explained why brokers need to master mortgage penalties, not just to protect their clients—but also to uncover hidden opportunities in their database.

"Penalties are like the death of the mortgage. If brokers are just focused on sales and not on what happens if the client needs to return their mortgage, we’re doing them a disservice." — Matt Imhoff

Now that we're entering a lower-rate environment, this knowledge is more valuable than ever. Homeowners locked into 5-6% mortgages may be able to break their mortgage, pay a penalty, and still come out ahead by refinancing at today’s lower rates. Plus, refinancing can help them consolidate high-interest debt, freeing up cash flow.

With the right tools, brokers can proactively identify these opportunities—and that’s exactly why so many are talking about the powerful combination of Ownwell’s refinance reports, Matt’s Prepayment Penalty Calculator, and My Broker Pro.

📺 Watch the webinar with Matt Imhoff and Sarah Mathieu here.
➡️ Want to learn the 10 biggest takeaways from Matt & Sarah’s webinar? Scroll to the end of this blog!

Why IRD Penalties Matter More Than Ever

Most brokers focus on getting their clients the lowest possible interest rate, but what happens if they need to break their mortgage before the term is up?

If they’re in a fixed-rate mortgage, they’ll likely face an Interest Rate Differential (IRD) penalty—and depending on the lender, that penalty can vary by tens of thousands of dollars.

Some lenders calculate IRD fairly using the actual discounted rate (the rate the client actually received), while big banks often inflate the penalty by using their higher posted rate instead.

🚨 Example: Two Different IRD Calculations for a Client with a $400K Mortgage

💡 That’s a $12,000 difference—just based on how the lender calculates IRD!

Matt explained this perfectly in the webinar:

“If we don’t know how penalties are calculated, how can we properly advise our clients? We need to understand what happens if a client needs to return their mortgage.”

This is why understanding how each lender calculates penalties is critical for brokers. The way IRD is calculated can make or break a refinance deal for your clients.

How This Creates a Huge Opportunity for Brokers Right Now

With interest rates finally coming down, a lot of clients who took mortgages in the last 1-2 years at 5-6% are wondering if they should refinance now to secure a lower rate.

✅ Many will need to pay a penalty to break their mortgage—but if the math works, they could still save thousands over the long term.
✅ Debt consolidation opportunities—Some homeowners are drowning in high-interest debt (credit cards, lines of credit, etc.). Even if they pay a penalty, a refinance at a lower rate could free up massive cash flow.
✅ Proactive client outreach—By leveraging your CRM, you can identify clients in high-rate mortgages and proactively reach out before they start shopping around.

Sarah put it best during the webinar:

"You lose a client, but never an opportunity. Add them to your CRM, track their penalties, and reach back out when the time is right." 

How Brokers Are Winning With Ownwell, Matt Imhoff’s Prepayment Penalty Calculator & My Broker Pro

Brokers are raving about the combination of:

✔ Ownwell – A game-changing refinance report that scans your database and identifies clients who would benefit from breaking their mortgage early. No more guessing—just targeted, data-driven refinancing opportunities.
✔ Matt Imhoff’s Prepayment Penalty Calculator – The most accurate and broker-friendly tool for estimating IRD penalties, helping you run real scenarios for clients. No more surprises!
✔ My Broker Pro – The ultimate CRM for tracking leads, managing clients, and turning penalty insights into closed deals.

"Brokers who understand penalties and use tools like Ownwell and My Broker Pro are the ones who are going to win this year." — Jayden Backs, Mortgage Broker

The brokers who are using all three together are ahead of the curve—helping their clients refinance strategically while growing their own business.

If you haven’t started leveraging prepayment penalty knowledge in your business, now is the time. Knowing this could be the key to unlocking massive refinance opportunities in 2024.

Start using your data to help your clients save—before another broker does! 

📺 Watch Matt Imhoff & Sarah Mathieu’s Prepayment Penalty Webinar Here:
🔗 https://www.youtube.com/watch?v=qWFjw_DSP-k

🔗 Learn more about Matt Imhoff’s Prepayment Penalty Calculator: https://www.penaltymentor.ca/
🔗 Check out Ownwell for refinance reports: https://ownwell.ca/

Top 10 Tips from Matt Imhoff & Sarah Mathieu on Prepayment Penalties

1️⃣ Brokers Need to Fully Understand Prepayment Penalties – You can’t give good advice without knowing how penalties work.
2️⃣ Know the Difference Between Posted vs. Discounted Rate Calculations – Some lenders inflate penalties by using posted rates.
3️⃣ Track Your Clients’ Penalties – Even After They Close – Use your CRM to track and follow up at the right time.
4️⃣ Use Prepayment Penalty Calculators to Run Real Scenarios – No more guessing—give clients real numbers.
5️⃣ Leverage a CRM (Like My Broker Pro) to Track Future Opportunities – Keep your pipeline organized.
6️⃣ Identify Debt Consolidation Opportunities – Sometimes breaking a mortgage can save clients more in the long run.
7️⃣ Use Ownwell to Find Clients Who Would Benefit from Refinancing – Automate your client analysis.
8️⃣ The Lower-Rate Environment is the Time to Be Proactive – Clients in 5-6% rates need a plan.
9️⃣ Not All Lenders Calculate Penalties the Same—Do Your Homework! – Call lenders and ask how they calculate IRD.
🔟 Brokers Who Master Prepayment Penalties Will Dominate This Year – The best brokers are the ones who understand penalties inside and out.

🚀Want to win more deals? Start mastering prepayment penalties today!