Think of it like returning an item to a store and paying a restocking fee. Stores would prefer all sales be final, but where they allow returns, they prefer to

Think of it like returning an item to a store and paying a restocking fee. Stores would prefer all sales be final, but where they allow returns, they prefer to charge for the service when they can. You bought a mortgage from the bank, now you want to return it. They want to charge you for that. See, the bank is not like your friend that lends you money. When your friend lends you money they are happy to receive payment early because they didn't actually want to lend it at all, it was a favor to you. They probably didn't charge interest, but if they did they did so because they "had to" (meaning they can't afford to lend you money as a flat out favor so they'll take the market rate, like when my friend the mechanic fixes my car but asks me to pay him because he's gotta live). When the bank lends money they _want_ to lend it, it's the whole point of their business. That's why they exist, to charge interest. When you pay back early you're reneging on the deal, so to speak, and defeating the purpose of the business. They don't want the money back until the agreed upon time, it throws a wrench in their plans, budgets, forecasts, etc. The fee covers the cost of this inconvenience and discourages you from doing so.