Ackman Pitches Prepayment Penalties as Way to Cut Mortgage Rates

Bill Ackman has an unconventional idea for lowering mortgage rates: make it harder to pay off the loans early.

The billionaire investor said over the weekend that adding prepayment penalties to new home loans could shave about 0.65 percentage point off borrowing costs — a meaningful break with 30-year rates sitting around 6.16%. Ackman floated the proposal on social media, framing it as a way for the Trump administration to make homes more affordable for Americans.

Bill Ackman

Photographer: Patrick T. Fallon/AFP/Getty Images

“While this feature is attractive for homeowners, it comes at a significant cost as buyers of mortgage backed securities (‘MBS’) require a significant ...