prepayment premium
USA
A penalty assessed against a borrower who elects to pay off a debt before its maturity date. This amount can potentially be quite significant.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

  • prepayment penalty — A fee imposed on a borrower who pays off a loan (usually a mortgage) before its due date. Lenders impose this kind of fee to encourage borrowers to hold a debt and keep paying interest on it for the whole term of the loan. Category: Bankruptcy,… …   Law dictionary

  • Prepayment Risk — The risk associated with the early unscheduled return of principal on a fixed income security. Some fixed income securities, such as mortgage backed securities, have embedded call options which may be exercised by the issuer, or in the case of a… …   Investment dictionary

  • Yield Maintenance — A prepayment premium that allows investors to attain the same yield as if the borrower made all scheduled mortgage payments until maturity. Yield maintenance premiums are designed to make investors indifferent to prepayment. Furthermore, It also… …   Investment dictionary

  • yank the bank clause — A clause in a facility agreement which gives the borrower the right to pay off a dissenting member of the lending syndicate. Typically the borrower will not pay a prepayment premium but will pay all accrued interest, fees, costs, expenses and… …   Law dictionary

  • yank-the-bank clause — A clause in a facility agreement which gives the borrower the right to pay off a dissenting member of the lending syndicate. Typically the borrower will not pay a prepayment premium but will pay all accrued interest, fees, costs, expenses and… …   Law dictionary

  • 'yank the bank' clause — A clause in a facility agreement which gives the borrower the right to pay off a dissenting member of the lending syndicate. Typically the borrower will not pay a prepayment premium but will pay all accrued interest, fees, costs, expenses and… …   Law dictionary

  • yank-a-bank — USA A clause in a loan agreement which gives the borrower the right to pay off and replace a single member of the lending syndicate in limited circumstances such as where a lender has requested reimbursement for taxes or increased costs of… …   Law dictionary

  • make-whole penalty — See prepayment premium Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010 …   Law dictionary

  • make-whole — USA See prepayment premium. Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010 …   Law dictionary

  • Collateralized mortgage obligation — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond …   Wikipedia

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