Fixed rate closed term Clause Samples
A fixed rate closed term clause establishes that a specific interest rate will apply to a loan or financial agreement for a predetermined period, during which the borrower cannot pay off the loan in full without incurring penalties. This means that the interest rate remains unchanged regardless of market fluctuations, and the borrower is committed to the agreed payment schedule for the entire term. The core function of this clause is to provide predictability for both parties by locking in the rate and repayment period, while also protecting the lender from early repayment that could disrupt expected returns.
Fixed rate closed term. Portability, carrying the terms of the loan to a new property.
Fixed rate closed term. Prepaying.
5.10.1 Your option to prepay. You can prepay part of what is owed as follows: The total of what you prepay under this section 5.10.1 in any calendar year cannot be more than: 10% of the original amount of the loan, if you have a BMO Smart Fixed Closed Mortgage; or 20% of the original amount of the loan, if you have any other mortgage product. You can't prepay less than $100 at a time. You can prepay in this way at any time during the year. If you don't use this option in one year (or you don't use all of it), you can't save it (or the rest of it) for another year. You don't have to pay us a prepayment charge. You don't have to tell us in advance that you want to prepay. You can't prepay under this section 5.10.1 if you've obtained a payout statement and it hasn't expired or been cancelled.
Fixed rate closed term. Increasing the instalment.
5.9.1 Your option to increase the instalment. Once in each calendar year, you can prepay by asking us to increase the instalment by up to 20%, or 10% for a BMO Smart Fixed Closed Mortgage, of the instalment just before the increase. If you don't use this option in one year (or you don't use all of it), you can't save it (or the rest of it) for another year. You don't have to pay us a prepayment charge.
Fixed rate closed term. Increasing the instalment.
7.9.1 Your option to increase the instalment. Once in each calendar year, you can prepay by asking us to increase the instalment by up to 20%, or 10% for a BMO Smart Fixed Closed Mortgage, of the instalment just before the increase. If you don't use this option in one year (or you don't use all of it), you can't save it (or the rest of it) for another year. You don't have to pay us a prepayment charge.
7.9.2 Your option, after an increase, to lower the instalment. After an increase under your option to increase the instalment, at any time during the term of the loan, you can ask us to lower the instalment. We don't have to lower the instalment if that would make the remaining actual amortization period after the change longer than the remaining contractual amortization period for the contract when you and we enter into the agreement to make the change.
7.9.3 How we make the change. When we increase or lower the instalment under this section 7.9, the terms of section 7.20 apply.