Yield Maintenance

AAA

DEFINITION of 'Yield Maintenance'

A prepayment premium that allows investors to attain the same yield as if the borrower made all scheduled mortgage payments until maturity.

INVESTOPEDIA EXPLAINS 'Yield Maintenance'

Yield maintenance premiums are designed to make investors indifferent to prepayment. Furthermore, It also makes refinancing unattractive and uneconomical to borrowers.

RELATED TERMS
  1. Yield

    The income return on an investment. This refers to the interest ...
  2. Loan

    The act of giving money, property or other material goods to ...
  3. Refinance

    1. When a business or person revises a payment schedule for repaying ...
  4. Total Annual Loan Cost (TALC)

    The projected total cost that a reverse mortgage holder should ...
  5. Surrender Period

    The amount of time an investor must wait until he or she can ...
  6. Forbearance

    A temporary postponement of mortgage payments.
Related Articles
  1. The Power Of Dividend Growth
    Investing Basics

    The Power Of Dividend Growth

  2. Junk Bonds: Everything You Need To Know
    Bonds & Fixed Income

    Junk Bonds: Everything You Need To Know

  3. Corporate Bonds: An Introduction To ...
    Bonds & Fixed Income

    Corporate Bonds: An Introduction To ...

  4. Bond Spreads: A Leading Indicator For ...
    Options & Futures

    Bond Spreads: A Leading Indicator For ...

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center