What is the prepayment penalty structure on a DSCR loan?

5/4/3/2/1 means 5% of the loan balance if you pay off in year 1, 4% in year 2, 3% in year 3, etc. So on $400k, a year 2 payoff would cost $16,000. Buy-downs are usually available - shorter prepay (3/2/1 or 2/1) bumps your rate by 0.25-0.50%.

We offer 5/4/3/2/1, 3/2/1, 2/1, and zero prepay options. The right choice depends on your hold strategy. Long-term hold? Take the 5-year prepay for the rate discount. Planning to refi or sell within 2-3 years? Pay up for the shorter penalty - it almost always pencils out.