What is the maximum prepayment penalty allowed for a mortgage under Rhode Island law?

In Rhode Island, the law generally prohibits prepayment penalties on most residential mortgage loans. This means that borrowers can pay off their mortgages early without incurring additional fees. The intent behind this regulation is to protect consumers and promote their ability to refinance or pay off loans without financial penalty, allowing for greater flexibility in managing debt.

While some mortgages might theoretically include other forms of penalties, the primary standard under Rhode Island law is the absence of such penalties for most residential loans. As a result, the correct answer highlights the consumer-friendly approach adopted by the state, making financing options more favorable for homeowners.