## Defeasance Calculator Help

What is the Defeasance Date?

This is the date you intend to defease the loan, usually timed to happen simultaneously with the closing of the property sale or refinance transaction.

What is a Partial Interest Loan?

This is a loan for which the borrower pays only the interest on the principal balance for a pre-determined period, after which it converts to a principal and interest payment (or amortized) loan. Also referred to as a partial interest-only loan.

What is the Final Interest Only Payment Date?

For partial interest loans, this is the last payment date on which only an interest payment is due. After
this date, the amortized payments begin and all subsequent payments include both the principal and interest payments.

What is the Final Payment Date?

Loan documents may refer to it as the Anticipated or Optional Repayment Date, Maturity Date, or sometimes the Balloon Date.

What Is the Interest Rate Calculation?

Interest is normally calculated on the basis of a 360-day year. Your loan documents will tell you how the days are counted in each period: “30/360″ assumes 30-day months, “Actual/360″ uses the actual number of days in the month.

What is the Loan Servicer?

The company that collects the monthly loan payments. Each loan servicer has a different fee schedule, which is typically based on the loan balance. If no servicer is selected, an average fee schedule will be used.

What is the Rates As Of?

This is the date of the market data used to determine the estimated cost of securities.

What is the Yield Curve Shock (bps)?

We assume that rates on the defeasance date will be the same as the rates in effect today. We also assume that the shape of the yield curve will remain the same. To adjust your estimate based on your expectations of market changes, enter a value in basis points (1/100th of a percent) to perform a parallel shift of the yield curve. Note: While rising rates will increase the cost of a future financing, they will reduce the cost of your defeasance collateral.Call us with questions about hedging your new financing.

What are Forecasted Rates?

The use of forecasted rates will determine the estimated cost of securities based on what the market projects the rates will be on the Defeasance Date.

These figures are only an estimate. The decision to defease should be based on a thorough understanding of the market and laws and regulations pertaining to real estate financing and securities.