Reviewed by Craig Hoebing, AZ Commercial Mortgage Banker CMB-1047342 · Updated October 2026
- Amortization
- The schedule that pays principal down over time, usually with a fixed monthly payment of principal and interest. A 25-year amortization on a 10-year term means the payment is calculated as if the loan lasted 25 years, but the remaining balance is due at year 10.
- Balloon
- The unpaid principal due at the end of the term when the loan has not fully amortized. Most permanent commercial mortgages have a balloon. An interest-only loan balloons for the entire original principal.
- Blanket mortgage
- One mortgage that covers more than one property. A default can reach every property in the blanket. It is different from a single-asset refinance, which is why portfolio loans have their own page.
- Bridge loan
- Short-term debt used while a property is being leased, renovated, or otherwise prepared for a permanent loan. It is usually interest-only. The takeout — the loan that is supposed to replace it — should be named before the bridge is treated as a plan.
- Cap rate
- Net operating income divided by value, expressed as a percentage. On the calculator, a cap rate you type is only a way to turn NOI into a value when you did not type a value. It is not a market survey.
- Capital stack
- The layers of money in a property, from the senior mortgage up through mezzanine or preferred equity to common equity. The senior loan is paid first. Everything above it takes more risk and usually costs more.
- Carve-out
- A list of acts, often called bad-boy acts, that make a otherwise non-recourse borrower personally liable. Fraud, bankruptcy filings, and unpaid taxes are typical examples. Non-recourse does not mean no one is ever liable.
- Cash-out refinance
- A new loan larger than the payoff of the old one, so proceeds go to the borrower. Lenders underwrite the use of that cash. It is not the same request as a rate-and-term refinance that only replaces the existing note.
- CMBS
- Commercial mortgage-backed securities. A conduit loan is pooled with others and sold to bond investors. A single-asset single-borrower loan backs its own deal. Prepayment is often defeasance or yield maintenance, which is why selling one building out of a pool is hard.
- Cross-collateralization
- A clause that lets the lender look to more than one property if one loan defaults. The mortgages may still be separate documents. The economic effect is a pool, which is the subject of the portfolio refinance page.
- Debt service
- The principal and interest the loan requires in a year, or interest only if the loan does not amortize. DSCR divides NOI by this number. A payment holiday or an interest reserve is not the same as in-place debt service.
- Debt yield
- NOI divided by the loan amount, as a percentage. It ignores the interest rate and the amortization. Lenders use it so a low coupon cannot hide a large loan. The calculator applies it only if you enter a minimum.
- Defeasance
- A CMBS-style prepayment in which the borrower buys a portfolio of securities that replaces the remaining loan payments, instead of simply paying the balance. The estimator on this site is a simplification and leaves out the cost of actually buying those securities.
- DSCR
- Debt service coverage ratio. NOI divided by annual debt service. A 1.25x DSCR means NOI is 25 percent higher than the loan payment. The target you type into the calculator is your test, not a lender's minimum.
- DUS
- Delegated Underwriting and Servicing, Fannie Mae's multifamily lender network. A DUS lender underwrites and usually services the loan. Capital Market Funds is not a Fannie Mae DUS lender. It arranges loans that a DUS lender, or another executing lender, may close.
- Guaranty
- A promise by a person or another entity to pay if the borrower does not. Full recourse, a completion guaranty, and a carve-out guaranty are different promises. SBA 504 generally requires owners of 20 percent or more to guaranty.
- Interest-only
- A period, or a whole term, in which the payment is interest and principal stays outstanding. The calculator's interest-only toggle prices the loan that way. A later amortizing period is a different payment.
- Life company loan
- Permanent debt from an insurance company, usually on a stable property, often with a rate lock at application and lower leverage than a cash-out CMBS loan. Capital Market Funds arranges these through correspondents. It is not the insurance company.
- Lockout
- A period at the start of a loan when prepayment is not allowed at any price. Yield maintenance and defeasance apply after the lockout, if the documents say so. A lockout is not a penalty. It is a closed door.
- LTV
- Loan to value. Loan amount divided by the property value, as a percentage. The calculator uses the value you type, or NOI divided by a cap rate you type. It does not appraise the building.
- Mezzanine
- Debt behind the senior mortgage, often secured by a pledge of the borrower's equity rather than a second lien on the real estate. It needs the senior lender's consent. Capital Market Funds arranges it through capital partners and does not fund it.
- Mortgage banker
- A firm that originates a commercial mortgage and places it with a capital source, and may service or simply stay with the file through closing. In Arizona that activity is licensed. It is not the same thing as being the bank that holds the loan.
- NOI
- Net operating income. Income from the property after operating expenses and before debt service, capital items, and income taxes. Lenders rarely accept the sponsor's NOI without a trailing statement and a vacancy or management adjustment.
- Non-recourse
- The lender's recovery is limited to the property, except for carve-outs. It is a document term, not a mood. The carve-outs can still put a person on the hook for specific acts.
- Owner-user
- A business that occupies the building it is financing, as opposed to an investor collecting rent from others. SBA 504 and many bank loans are built for owner-users. Occupancy percentages are set by the program, not by this glossary.
- Preferred equity
- An ownership slice that is paid before common equity, often with a stated yield. It is not a mortgage. Senior lenders still read the operating agreement. Capital Market Funds does not buy the preferred equity.
- Prepayment penalty
- Money owed if the loan is paid early. Step-down, yield maintenance, and defeasance are three different designs. The estimator labels each simplification. The note and the servicer control the real figure.
- Prime rate
- On this site, the bank prime loan rate from the Federal Reserve's H.15 release: the rate posted by a majority of the top 25 insured U.S.-chartered banks. It is an index some banks use. It is not a commercial mortgage quote.
- Rate lock
- An agreement, for a period, that a quoted rate will hold while the loan moves toward closing. Life company locks are often at application. A number on a webpage is not a lock.
- Recourse
- The lender can pursue the borrower, or a guarantor, beyond the property. Full recourse is common on bank loans. Partial recourse might cover a percentage of the balance or a specific period.
- Release provision
- The clause that lets one property out of a blanket or cross-collateralized loan if a test is met and a release price is paid. Without it, selling one building can require paying off the entire pool.
- SBA 504
- A program in which a third-party lender, often a bank, makes a first mortgage and a certified development company makes a second loan funded by a debenture SBA guarantees. Capital Market Funds is not the SBA lender and not the CDC. The quick-reference page has the structure.
- SOFR
- The Secured Overnight Financing Rate, published by the Federal Reserve Bank of New York. The 30-day Average SOFR is a compounded average of that overnight rate. It is not CME Term SOFR, which this site does not display.
- Spread
- The margin added to an index, in percentage points or basis points, to get an all-in rate. On the calculator, the spread is whatever you type. The site does not fill in a market spread.
- Step-down
- A prepayment schedule that charges a percent of the balance in year one and a smaller percent each later year, then zero. A 5-4-3-2-1 schedule is five percent in year one, four percent in year two, and so on.
- Term sheet
- A summary of proposed loan terms from a capital source. It is not a commitment unless it says so and the conditions are met. A calculator result is not a term sheet.
- Treasury yield
- The yield on a U.S. Treasury security. The rates page shows the Treasury Department's daily par yield curve for the 5-, 7-, and 10-year points, with the date of that curve. Loan documents define which Treasury a yield-maintenance formula uses. The calculator does not guess it.
- Yield maintenance
- A prepayment formula meant to give the lender the same yield it would have earned if the loan had stayed outstanding. The estimator discounts the gap between your note rate and a Treasury yield you enter. Actual notes define the Treasury, the discount, and any minimum.
- USDA B&I
- The Business & Industry guaranteed loan program from USDA Rural Development. An approved lender makes the loan. USDA provides a guarantee in eligible rural areas. Capital Market Funds arranges; it does not issue the guarantee.
Rates and calculator · How much can I borrow · Prepayment estimator · Lender-type comparison · FAQ