Definition: The mortgage without prepayment penalty means that the interest rate on a loan remains at its original level throughout the term of the loan, even if the borrower chooses to prepay the loan in full or part of it by paying back all or a portion of the outstanding principal amount during the grace period before making any interest payments. In other words, the borrower is not charged any penalties or interest on their mortgage at the end of the original term unless they choose to prepay the entire balance. The reason for this is that the lender expects borrowers to make timely and full repayments on time, even if interest rates increase due to a change in market conditions. The word "mortgage without prepayment penalty" is commonly used in finance to describe a loan where the borrower does not pay back their outstanding principal amount in full at the end of its term. This means that there is no interest paid during the grace period after the initial payment, and therefore, the borrower is not subject to penalties or interest charges for defaulting on the loan. It's important to note that in most cases, borrowers are only required to make payments on time and under their original contract terms. If a borrower chooses to prepay the entire balance by making all or part of the outstanding principal amount during the grace period, they typically must pay back the full amount due at the end of the original term without any penalties or interest charges. In summary, "mortgage without prepayment penalty" refers to a loan where the borrower makes all or part of their outstanding principal amount during the grace period before making any interest payments, thus avoiding any penalties or interest charges for defaulting on the debt.

mortgage without prepayment penalty