If this is your situation, the question from your current lender is invariably "are you going to buy again?".
- If you are not, you'll likely be stuck with the greater of a three month interest penalty or an interest rate differential (IRD) penalty. (Once again - check if the original Mortgage was insured by CMHC - you may get away with three months interest penalty if the IRD is very large).
- If you are going to buy again, the lender will usually insist on financing the property, increasing and blending - or decreasing - and porting the mortgage to your new home. But on the assumption that you don't want to buy again immediately (you may be out of the country, or believe the market is about to drop substantially, etc.) the lender will almost always charge you the full penalty (IRD), but offer at least a partial rebate if you borrow from them when you repurchase.
Mortgage avance and counsel > Refinancer
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