Given points 1) and 2) I feel satisfied with the explanation.
But ideally prepayment penalties would make sense as it would give incentives to lenders to offer longer term loans.
no, thats traditional-banking bullshit, we dont need no "penalties" and such stuff
or then lenders should also be able to claim back their money and force you out in that case if that's what you prefer. There needs to be an incentive to provide longer term loans.