ike homeowners taking advantage of historically low mortgage rates to reduce their monthly payments, co-op corporations are anxious to refinance underlying mortgages on their buildings. But many co-ops face a hefty penalty if they pay off the current loan before its term expires.

Lenders have responded by offering what are called "forward commitment/early rate lock" agreements as a way to help co-ops avoid or minimize prepayment penalties.

Prepayment penalties are typically either an amount equal to what the lender would lose in interest payments as a result of the prepayment or a percentage of the outstanding principal of the mortgage.

The forward commitments, which result in a small increase in the interest rate for the loan, generally run for 2 to 10 months but could stretch to one year. Industry professionals said the number of co-ops using such commitments was growing and included 860 Fifth Avenue in Manhattan, with 156 apartments, and Park City Estates, a five-building complex of 1,049 apartments on 98th Street in Rego Park, Queens.

Gregg Winter, president of Winter & Company Commercial Real Estate Finance, a Manhattan mortgage brokerage firm, said that for some co-ops the forward commitment could dovetail with the expiration of the current loan, eliminating the prepayment penalty. For others it could delay the closing to a point in the existing loan when the prepayment penalty could either be paid or reduced, said Mr. Winter, whose firm has done 10 such deals including the one at 860 Fifth Avenue.

Borrowers pay a premium to lock in the current low rate for several months. It amounts to an interest rate increase of two to five basis points (a basis point is one-hundredth of a percentage point) for each month of the extension.

For example, Mr. Winter said, a co-op that locked in a 5.6 percent rate and delayed the closing for 10 months could get the first four months free and then be charged 5 basis points a month for the remaining 6 months.

Borrowers must also pay a deposit of 2 to 3 percent of the loan, which is refunded when the loan closes and forfeited if it does not close.

Mr. Winter said that in the case of 860 Fifth Avenue the co-op took a 10-year fixed-rate mortgage in June for $6.7 million, locking in a 5.95 percent interest rate, but delayed the closing for four months until last Friday. It replaced the co-op's existing $4.6 million loan, which had a 7.15 percent interest rate and would not expire until December 2003.

Les Tanner, the chairman of the board at 860 Fifth Avenue, said the co-op not only got the lower interest rate and borrowed additional money for ongoing capital improvements, but also reduced its annual mortgage payments by $16,000 to $404,000 as well as its prepayment penalty by $50,000, to $286,508. And it was done without raising residents' monthly maintenance cost, Mr. Tanner said, adding that, "it was a win-win."