What's the difference between
and
Enter two words to compare and contrast their definitions, origins, and synonyms to better understand how those words are related.

Prepayment vs Buydown - What's the difference?

prepayment | buydown | Synonyms |

Buydown is a synonym of prepayment.



As nouns the difference between prepayment and buydown

is that prepayment is a payment in advance while buydown is an accelerated repayment of the principal of a loan.

prepayment

English

Noun

(en noun)
  • A payment in advance.

    • External links

    * ("prepayment" on Wikipedia)

    buydown

    English

    (wikipedia buydown)

    Alternative forms

    * buy-down

    Noun

    (en noun)
  • (finance) An accelerated repayment of the principal of a loan.
  • A payment by a third-party to a lender to reduce some of all of the payments otherwise required, especially in first few years of the loan, thereby enhancing the apparent quality of the loan.

    • Synonyms

    * (accelerated repayment of principal) prepayment, accelerated or lump-sum amortization.

    Related terms

    * buy down