Work out prepayment penalty instantly with clear inputs, formula shown and shareable results.
A prepayment penalty is a percentage of the balance repaid early. Comparing it with the interest that would otherwise accrue — and expressing it as the number of months of interest it equals — makes the decision straightforward.
Break-even
Break-even months = penalty / (balance × monthly rate)
Figures are estimates. Lenders apply their own rounding, fees and eligibility rules, and rates change. This is not financial advice — confirm the numbers with your lender.
A flat percentage of the amount prepaid, sometimes tapering with the years elapsed, and often waived after a lock-in period.
Frequently yes, particularly if you are refinancing with the same group or repaying from your own funds.