MichaelC 160 Report post Posted April 9, 2014 It's unusual that a traditional mortgage from a major lender would incur a prepayment penalty, especially one of that size. It's not as if these days homeowners are trading in an 11% interest rate loan for one that charges 4%. Neither Fannie Mae, nor Freddie Mac, nor FHA loans incur prepayment penalties. Share this post Link to post Share on other sites