In the event, the owner pays a penalty for renewing the mortgage due to a lower interest rate for the rental property, then as per the Conditions under subsection 18(9.1) you can claim it as an expense for the next return.

For more information, please see the attached link.

Conditions under subsection 18(9.1)

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Thanks for your help.  The wording in the subsections are sometimes difficult to understand as I have to read it over several times.  Does that mean I can only claim the interest expense on the 2022 return and not the 2021 return when the penalty occurred?