A penalty for late payment of a mortgage payment is known as a prepayment penalty.

Name: A penalty for late payment of a mortgage payment is known as a prepayment penalty.
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A penalty for late payment of a mortgage payment is known as a late fee, not a prepayment penalty. A prepayment penalty is a fee charged by a lender if a borrower pays off a loan earlier than the agreed-upon terms.

A Penalty for Late Payment of a Mortgage Payment Is