prepayment privilege

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.

prepayment privilege

See prepayment clause.

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The loan has a flexible 9 year term which gives the new owner's the ability to make needed upgrades and improvements to the property with a liberal prepayment privilege. The property was purchased to reposition the asset based on existing vacancy.
The non-recourse financing was done at par and has a prepayment privilege on a declining scale.
Prepayment penalty: A consideration paid to the mortgagee for the prepayment privilege. Also known as prepayment penalty or reinvestment fee.
The New York based lender did not charge a fee, and the loan, as well as having a flexible, sliding-scale prepayment privilege, also allows for a five-year option at 2.5 percent over the FHLBNY rate.
'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.