What is a “Fair-Penalty Lender”?
A fair-penalty lender calculates its standard prepayment charges, for lack of a better word, “fairly.”
It does so by comparing your actual mortgage rate to a rate equal to (or close to) what it charges new customers for a time frame similar to your remaining term.
Unlike the Big Six banks, fair-penalty lenders don’t use arbitrarily inflated rates (“posted rates”) in their calculations. That only serves to drive up penalties.