By James R. G. Cook ( October 19, 2021, 8:41 AM EDT) -- Prepayment terms and penalties are common features of mortgages in Canada but there have been few cases that have specifically addressed the word “prepayment” in the context of a dispute between a borrower and lender. The rationale for a prepayment penalty is generally viewed as a way to compensate a lender for the unexpected return of funds and the time required to find another borrower. Whether a penalty has been triggered by the prepayment of the mortgage depends on the wording of the contract between the parties....