Bridge prepayment usually has a 12 to 18 month minimum-interest or spread -maintenance period, then opens to free prepayment with a small exit fee (often 1 percent). Spread maintenance makes sure the lender earns a defined return on the loan even if the borrower repays during the lockout window.
How does spread maintenance differ from a make-whole?
Spread maintenance compensates the lender for unearned spread (loan margin) only, not the underlying SOFR base. Make-whole on fixed-rate debt compensates for both lost spread and lost coupon. Spread maintenance therefore costs the borrower less on early payoff than fixed-rate yield maintenance would.
What is the typical exit fee?
1 percent of loan amount paid at refinance or sale, sometimes with a partial waiver if the take-out is sourced through the same lender. Exit fee plus minimum-interest period is the lender's recovery for fixed origination costs and required minimum return.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1