prepayment privilege

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Prepayment Privilege

The right of a borrower to repay a debt in full before it is due. The prepayment privilege is favorable to the borrower because it relieves him/her of the debt, but it deprives the lender of interest that he/she would have received otherwise. However, some lenders offer the prepayment privilege to encourage potential borrowers to borrow from them instead of their competitors.
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prepayment privilege

See prepayment clause.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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'All RBC mortgages come with amortisations of up to 30 years and full prepayment privileges. Also, Canadians can take advantage of our 'double up' feature to become debt free faster,' she added.
Open pools consist of mortgages where the borrower has prepayment privileges, which are passed on to the investor when exercised.