Prepayment penalty
A penalty charged when you break a closed mortgage before term end. For fixed rates, it's the greater of 3 months' interest or IRD (interest rate differential). For variables, it's typically 3 months' interest. There is no penalty at renewal.
IRD is calculated by the lender's internal formula — big-bank IRDs are almost always much larger than monoline IRDs for the same rate movement, because the banks compare your contract rate to their current posted rate (higher), not the discounted rate you'd actually get today.
Example: A $400,000 mortgage at 5.5% with 2 years left, when current 2-year rates are 4.5%. The 3-months'-interest calculation is ~$5,500. Big-bank IRD on the same mortgage can be $15,000–$20,000. Monoline IRD is often just the 3-months'-interest floor.