How much is an average prepayment penalty?
The concrete amount is individual to each case, of course. It depends on the penalty terms agreed upon in the mortgage contract. Sometimes it is a fixed amount (an equivalent of six months of interest, for instance), or a percentage of the outstanding balance, fixed (around 2%) or regressive. For example, the penalty for prepaying the mortgage in its first year may be 5% of the original balance, in the second year – 4%, in the third year – 3% etc.
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