Making a hefty pre-payment toward your mortgage before you pay it off early is a good idea. You may be able to lessen the pre-payment penalty you will be charged when you discharge, or pay-out the mortgage prior to its maturity date. However, lenders’ rules vary and you will have to investigate them in advance of planning your break strategy.
Some lenders will specify that pre-payments cannot be made within 30 days of the discharge date. Inquire with your lender to see how close to the discharge point you can make this payment, and then make it as early as possible. Ensure that this pre-payment goes through and that your balance has been adjusted before your payout statement is requested. You want to be sure that the balance on which your penalties will be calculated has your pre-payment deducted from it.
