"Prepayment risk" refers to the possibility that a borrower will repay their debt earlier than expected. This can be risky for lenders because they may lose out on potential interest payments. Full definition
Interest - rate risk is the opposite of prepayment risk: when rates go up, the value of your bond will drop (it drops more, the further away it is from maturity). (wikinvest.com)
Investments in asset backed and mortgage backed securities are subject to prepayment risk which can limit the potential for gain during a declining interest rate environment and increases the potential for loss in a rising interest rate environment. (ssgafunds.com)
An investor needs to consider prepayment risk, underlying collateral performance, subordination, and a number of other risks when investing in this space. (blackrockblog.com)