REAL ESTATE GLOSSARY
Yield Maintenance
Yield Maintenance
A prepayment formula intended to compensate a lender for lost interest.
What does Yield Maintenance mean?
A prepayment formula intended to compensate a lender for lost interest. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Yield Maintenance in context
Falling market rates can make yield-maintenance costs significant on an early payoff.
Why it matters in financing
Yield Maintenance can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related real estate terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.