The prepayment premium which will equal the present day value of any costs the to the lender resulting from the difference in interest rates between the date of the note and the date on which the prepayment was made. In layman's terms, the borrower must pay the lender enough cash to replace the loans future cash flows using Treasury Securities.
a prepayment premium that allows investors to attain the same yield as if the borrower made all scheduled mortgage payments until maturity. Yield maintenance premiums are designed to make investors indifferent to prepayments and to make refinancing unattractive and uneconomical to borrowers.
A prepayment premium that allows lenders to attain the same yield as if the borrower made all scheduled mortgage payments until maturity. The lender collects a lump sum from the borrower based on a formula that considers the present value of the difference between the prepaid loan's interest rate and current rates with a similar maturity date.
Assistance from a financial institution's insurer that provided a guarantee that certain assets purchased by an acquiring institution in a resolution would yield a prescribed rate of return. In many cases, the yield on these assets could be substantially higher than the institution's cost of funding or cost of carrying the assets. Conceptually, yield maintenance and income maintenance agreements are similar in that they both essentially provide for income protection for nonperforming or low-yielding assets acquired in an assistance transaction. Source
For a GNMA or other mortgage security bought under a futures contract or standby commitment, the adjustment of the price upon delivery necessary to provide the same yield to the buyer that was specified in the original agreement. Yield maintenance becomes necessary when the coupon on the GNMA that is delivered is different from the coupon that had been expected at the time the agreement was made.