What is prepayment protection?
Loan provisions (yield maintenance, defeasance, lockouts, step-down penalties) that compensate the lender or bond investor if the borrower repays before maturity, especially after rates decline.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.