Reviewed by Craig Hoebing, AZ Commercial Mortgage Banker CMB-1047342 · Updated October 2026
Shared inputs
Not filled from the rates page. Type the yield in the loan documents' definition, or the yield you want to test.
Step-down schedule
Example: 5, 4, 3, 2, 1. Year 6 in that example is zero.
Step-down estimate
Enter a balance and a year.
Simplified yield maintenance
Enter balance, note rate, Treasury yield, and months.
Simplified defeasance premium
Uses the same balance, note rate, Treasury yield, and months.
SBA 504 debenture premium
This block is only the CDC debenture. The bank's first mortgage has its own prepayment terms. SBA Form 1504 states the repurchase premium as remaining debenture principal times the debenture rate times a year factor. For a 20- or 25-year debenture the factor runs 1.00, 0.90, 0.80, down to 0.10 in year 10, then zero from year 11. A 10-year debenture uses 1.00, 0.80, 0.60, 0.40, 0.20, then zero from year 6. People call the longer schedule "10-9-8-7-6-5-4-3-2-1" because the factor steps down by a tenth. It is not a penalty that starts at 10 percent of principal.
504 premium only
Enter the debenture balance, the rate on the debenture, and the year.
What these formulas leave out
Step-down multiplies the balance by the percent for that year. Yield maintenance, as simplified here, is the present value of the monthly gap between your note rate and the Treasury yield you typed, charged on today's balance for every remaining month and discounted at that same Treasury yield. It does not follow a declining principal balance.
The defeasance figure discounts the remaining payments, including a final principal balloon when interest-only is checked, or a payment that fully amortizes the balance over the months you entered. It subtracts the balance. A real defeasance buys a Treasury portfolio, pays counsel and an accountant, and follows the loan agreement.
Not legal or financial advice. Confirm the number with the loan documents and the servicer before you rely on it. Capital Market Funds arranges financing and is not the lender or the servicer.
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