Best Answer: Hertz, in electronic terms, means cycles per second. This originally pertained to radio waves and sound waves, but is now commonly used to measure the speed of a computer processor (the number of hertz is equal to the number of clock ticks that a processor will have in one second). Here are the most commonly used prefixes and their rough sizes: Kilo - a thousand.
The prepayment penalty is often 80% of six months interest. It can vary, but in our example it is 80% because the lender allows the borrower to pay off 20% of the loan balance each year, so the penalty only hits the borrower for 80%.o if a borrower has a mortgage rate of 6.5% on a $500,000 loan amount, their interest-only payment comes out to $2708.33 per month. Multiply that by six months, take 80% of the total, and you end up with a hefty prepayment penalty of $13,000. An example of a prepayment penalty:
DEFINITION of 'Prepayment Penalty'. A clause in a mortgage contract that says if the mortgage is prepaid within a certain time period, a penalty will be assessed. The penalty is usually based on percentage of the remaining mortgage balance or a certain number of months worth of interest. A prepayment penalty that applies to both the sale of a home and a refinancing transaction is called a hard prepayment penalty. A prepayment penalty that applies to refinancing only is called a soft prepayment penalty. Next Up.