CMBS Prepayment

Lockouts in Relation to CMBS Loans

Lockouts in Relation to CMBS Loans

For borrowers, prepayment penalties can be one of the most challenging aspects of CMBS loans. In addition to prepayment penalties, however, most conduit loans have a lockout period, a period of time in which the loan cannot be prepaid at all.

Prepayment Penalties for CMBS Loans

Prepayment Penalties for CMBS Loans

If you take out a CMBS loan, and you want to pay off the loan early, perhaps because you’re selling the property, you’ll usually have to pay a prepayment penalty. Prepayment penalties are designed to compensate the lender, or, in the case of CMBS loans, the investors, for the loss of income that will result from a borrower paying off their loan early.