Calculate mortgage prepayment penalty for real estate investments and properties
Enter loan balance, prepayment penalty percentage, and payoff timeframe. The calculator shows the penalty cost for early payoff.
Paying off a $400,000 loan with a 2% prepayment penalty within 3 years costs $8,000 in penalties.
Rare on conventional residential mortgages. More common on commercial loans and some investor-property loans. Always review your loan documents.
3-2-1 declining (3% year 1, 2% year 2, 1% year 3) or 6 months interest. Commercial loans often have yield maintenance or defeasance.
Sometimes, especially if you have strong credit and are willing to accept slightly higher rate. Or wait for penalty period to expire before refinancing.