Canada has the pre-payment penalties as well. Wouldn't surprise me that origins of the Canadian system came from the UK.
The US typically doesn't have pre-payment penalties which is another benefit for US homeowners since if you get a mortgage rate of 6% and a 30 yr term and rates drop to 3%, you can simply refinance without pre-payment penalty and lock in a lower rate. You do need to pay mortgage fee with the refinance, but banks often have deals where the costs are pretty low.
That said, one has to wonder if the US mortgage rules create perverse incentives for US homebuyers.
The US typically doesn't have pre-payment penalties which is another benefit for US homeowners since if you get a mortgage rate of 6% and a 30 yr term and rates drop to 3%, you can simply refinance without pre-payment penalty and lock in a lower rate. You do need to pay mortgage fee with the refinance, but banks often have deals where the costs are pretty low.
That said, one has to wonder if the US mortgage rules create perverse incentives for US homebuyers.