Some lenders levy a prepayment penalty if you pay off all or a portion of your mortgage early. If you have a prepayment penalty, you agreed to it when you closed on your house. Prepayment penalties do not apply to all mortgages. Typically, a prepayment penalty only occurs if you pay off the whole mortgage sum within a certain number of years because you sold your property or refinanced your mortgage (usually three or five years). If you pay off a considerable portion of your mortgage at once, you may be subject to a prepayment penalty in some instances. Prepayment penalties are usually waived if you pay additional principal on your mortgage in tiny increments–but it’s always a good idea to double-check with your lender.