Which clause in a mortgage agreement allows for early repayment of the loan?

The prepayment clause in a mortgage agreement specifically allows the borrower to make early repayments on the loan without incurring significant penalties. This provision provides the flexibility for the borrower to pay off the loan ahead of schedule, which may reduce the overall interest paid over the life of the loan. It is beneficial for borrowers who may have additional funds available or who may refinance the mortgage to take advantage of better interest rates.

While the acceleration clause has its own importance, primarily allowing the lender to require immediate payment of the entire outstanding balance under certain conditions, it does not facilitate voluntary early repayment by the borrower. The defeasance clause is generally related to the release of the lender’s claim on the property once the mortgage has been fully paid, and the waiver clause refers to the relinquishment of a right or privilege, which is not related to early repayment options.

Therefore, the prepayment clause is the accurate answer as it directly pertains to the ability of the borrower to repay the mortgage prior to the scheduled maturity date.