Yield Maintenance

Glossary of Terms Related to Commercial Mortgages and Loans

A type of prepayment penalty, according to which the prepayment fee equals the difference between the original interest rate and the current market rate, multiplied by a set penalty amount. In practice the yield maintenance penalty amount is meant to equal the total return a lender would receive on its loan if the loan were carried for the entire term.

Related entries:

• Pre-Payment Penalty

See also:

• Pre-Payment Penalties (Article)

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