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Yield Maintenance Prepayment Calculator

Simulate commercial mortgage prepayment penalties, present value cash flow differentials, and Treasury replacement benchmarks for CMBS, agency multifamily, and SBA loans.

Commercial Loan Details

CMBS & Agency Standard

Prepayment Principal Balance$

Note Interest Rate (%)Original Contract Rate

Current Matching US Treasury Yield (%)Reinvestment Benchmark

Remaining Months to Maturity / Yield Window60 Months (5.0 Yrs)

Mos

Minimum Penalty Floor (%)Usually 1.00%

Estimated Yield Maintenance Prepayment Penalty

Penalty equals 0.00% of outstanding principal balance.

Interest Differential

+0.00%

Note Rate minus Treasury Rate

Total Payoff Amount

Principal + Penalty Fee

Present Value Discount

Discounted cash flows

1% Minimum Floor

Contractual fee guarantee

Commercial Payoff Summary

Calculating yield maintenance cost...

Yield Maintenance & Commercial Real Estate Prepayment Strategy

Unlike simple percentage penalties on residential or personal loans, commercial CMBS and multifamily lenders use Yield Maintenance to preserve bond-equivalent returns against current Treasury yields. When Treasury rates sit below your note rate, the present-value spread increases your exit fee—making timing crucial before refinancing via our Mortgage Refinance Calculator.

To benchmark commercial Yield Maintenance against simpler retail penalty structures, test fixed percentage fees with our Prepayment Penalty Calculator or read How to Calculate Prepayment Penalty. For full residential loan exits, use the Loan Preclosure Calculator or explore every debt payoff tool in the Debt & Closure Hub.

Frequently Asked Questions

What is Yield Maintenance in commercial loan prepayment?

Yield Maintenance is a prepayment penalty clause commonly found in commercial real estate loans, Fannie Mae/Freddie Mac multifamily mortgages, and conduit CMBS loans. It ensures the lender receives the exact same financial yield (cash flow) as if the borrower continued paying interest until maturity—compare it with fixed percentage penalties using our Prepayment Penalty Calculator.

How is the Yield Maintenance penalty calculated?

The penalty equals the present value of the remaining interest payments that the lender would lose by having the loan prepaid, discounted at the current replacement benchmark rate (typically the current US Treasury note rate of matching maturity). For residential loans or simple percentage fee schedules, see How to Calculate Prepayment Penalty.

What is the difference between Yield Maintenance and Defeasance?

Yield Maintenance pays a cash penalty directly to the lender to cancel the debt. Defeasance replaces the real estate collateral with a portfolio of government treasury bonds that generate the same cash flow. If you are weighing early exit versus refinancing, test net proceeds in our Mortgage Refinance Calculator or Loan Preclosure Calculator.

How do SBA 504 and SBA 7(a) prepayment penalties work?

SBA 504 loans feature a declining 10-year prepayment penalty (from 100% of debenture interest in Year 1 down to 0% after Year 10). SBA 7(a) loans with maturities >= 15 years carry a 3-year penalty (5% Year 1, 3% Year 2, 1% Year 3)—check whether partial reductions make sense with the Lump Sum Prepayment Calculator.