💰 Prepayment Penalties, Yield Maintenance & Defeasance Explained 📊

Bill Rapp - Commercial & Residential Mortgage Broker

Published on: 11/08/2025

💰 Understanding Prepayment Penalties, Yield Maintenance & Defeasance When securing a commercial mortgage, most borrowers focus on interest rates, loan terms, and closing costs — but there’s another critical detail that can significantly impact your bottom line: prepayment penalties. These fees are designed to protect lenders from lost interest income when loans are paid off early. The two most common forms in commercial real estate finance are Yield Maintenance and Defeasance.