Floating- and Fixed-Rate Prepayment Report, as of December 2023
In this report, we leverage our own data and focus on the voluntary prepayment activity of our floating- and fixed-rate K-Deals® over a 12-month period ending in December 2023. We look at prepayment speeds, lockout periods, seasoning and find that prepayments are generally highest when prepayment premiums are lowest and interest rates are low as well as among more seasoned loans.
Freddie Mac Multifamily introduced the KF series of floating-rate K-Deals to our securitization platform in October 2012. This offering provides borrowers with the ability to obtain financing indexed to lower, short-term rates along with more prepayment flexibility. Through December 2023, we have funded and securitized nearly 6,800 floating-rate loans totaling nearly $167 billion. Floating-rate loans offer borrowers more prepayment flexibility, with 80% choosing a one-year lockout followed by 1% prepayment premium.
Our fixed-rate prepayment analysis is based on three years of data from January 2021 through December 2023. Fixed-rate loan prepayments are minimal until the loans enter their open period, at which point prepayment speeds increase, although due to the higher interest rates those prepayment speeds are coming down as well.
Additional resources
- See our K-Deal Investor Presentation for more background information.
- For additional details around loan payoffs, please reference our K-Deal Performance Presentation.