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The "Could not estimate prepayment penalty" error

The most common reason why Ownwell cannot generate an estimate for a mortgage switch or refinance.

Dan MacDonald avatar
Written by Dan MacDonald
Updated over a month ago

The Ownwell Digest can include up to three "opportunities" to help clients understand how to save money and build wealth through their home:

  1. Interest Savings Module – Estimates savings or costs from switching a mortgage.

  2. Purchasing Power Module – Shows how much home the client could afford if they were to sell their existing home and invest the proceeds in a new one.

  3. Access Equity Module – Highlights equity the client could unlock by refinancing.

Prepayment Penalty Estimates

Both the Interest Savings Module and the Access Equity Module include an estimate for the prepayment penalty. When the client’s current mortgage has a fixed rate, the prepayment penalty is calculated as the greater of:

  • Three Months’ Interest (easy to estimate), or

  • Interest Rate Differential (IRD) (requires additional variables).

Why This Error Occurs

This error appears because Ownwell could not estimate the IRD penalty. This typically happens when Ownwell is unable to find a rate for a comparable mortgage term(a key input for calculating the IRD).

The most likely reasons are:

  • The Lender Name on the client’s mortgage is missing or doesn’t match a recognized lender in Lender Spotlight.

  • The mortgage has already matured (term remaining is zero).

How to Fix the Issue

Update the Lender Name:

  1. Open the client’s Original Mortgage form.

  2. Click Edit, then go to the Lender Name field.

  3. Select the lender from the dropdown list of recognized lenders.

Update the Mortgage Term:

  1. Open the client’s Original Mortgage form.

  2. Click Edit, then enter details of the new mortgage term.

What Happens Next?

This issue does not prevent you from sending the Homeownership Digest. If the IRD penalty cannot be estimated, the Interest Savings Module will simply be hidden.


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