Most commercial loans charge you to pay off early. The penalty protects the lender's expected yield — and the structure varies widely, so two loans at the same rate can have very different real costs if you might sell or refinance before term.
Step-down (declining) prepayment
A fixed percentage of the balance that falls over time — e.g., 5% in year one, 4% in year two, and so on (often written 5-4-3-2-1). Simple and predictable; common on bank and bridge loans.
Yield maintenance
You make the lender whole for the interest it would have earned, discounted to today. When rates have risen since you closed, yield maintenance can be cheap; when rates have fallen, it can be very expensive. Common on fixed-rate, longer-term loans.
Defeasance
Instead of paying the loan off, you replace the property as collateral with a portfolio of government securities that reproduces the remaining payments. Common in CMBS loans; it's complex, has transaction costs, and takes weeks to arrange.
Lockout
A period — often the first year or two — when you simply cannot prepay at all. Watch for it if you might sell early.
What to ask
Always ask how the prepayment penalty is structured, when it burns off, and what it would cost to exit in year 2 or 3 under today's rates. If you expect to sell or refinance early, a step-down can be worth more than a slightly lower rate.