A woman in Airdrie was shocked to learn her mortgage prepayment penalty was much higher than she thought.

Kelly Viera put the family home up for sale after her husband accepted a three-year contract in Egypt.

When Viera's husband was considering the job, they asked their lender how much the penalty would be for selling their home before their mortgage was paid off.

Viera says they were told they would have to pay three months interest which amounted to about $6,000.

A year later when their home was sold they thought that's what they would be paying but instead they were told they had to pay more than $15,000.

The penalty was much higher because the lender had used a different formula to calculate the prepayment penalty.

Instead of the simple three months interest based on your remaining principal calculation, the bank used the interest rate differential calculation.

The interest rate differential calculation subtracts your interest rate from the current interest rate then multiplies that number by the number of months you have left on your mortgage.

When interest rates are low it means the bank gets more money out of the interest rate differential calculation than the three month interest calculation.

The Viera's realized their mortgage contract gave the lender the right to use either formula.

The way to protect yourself from prepayment penalty shock is to get a payout quote, in writing, from your lender stating exactly how much you'll have to pay.