Prepayment Penalty
HFF offers two distinct mortgage classes to potential homebuyers, with or without a prepayment clause*.  Mortgages with  prepayment conditions hold a lower interest rate than ones without such conditions. Additionally, the prior category has restrictions in terms of maturity adjustment. While the maturity date on mortgages without a prepayment condition can both be decreased and extended, the alternative category only allows for the maturity date to be extended.

*A prepayment fee is collected at HFF in the event of partial prepayment or an early payoff only if the current interest rate at HFF is lower than the existing mortgage rate at the time of payment.

The table below demonstrates the potential prepayment penalty on a 40 year mortgage loan issued with a 5,20% interest rate :

Interest rate at
   time of payment  

Expected prepayment fee
 on HFF loans
 

 35 years left 

 25 years left  

  15 years left
4,50% 0,00% 0,00% 0,00%
4,40% 1,32% 1,04% 0,69%
4,30% 2,67% 2,09% 1,39%
4,20% 4,05% 3,16% 2,09%
4,10% 5,46% 4,25%  2,81%
4,00%

6,89%

 5,35% 3,53%
3,90% 8,36% 6,48% 4,26%
3,80% 11,39% 8,78% 5,73%
3,70% 12,95% 9,95% 6,48%