Yield Maintenance Calculator
Estimate the yield maintenance premium on a fixed-rate multifamily loan from your balance, note rate, Treasury yield and months to maturity, and compare it with a step-down schedule.
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Estimate your prepayment premium
For the remaining yield-maintenance period
Note settings (advanced)
Some notes add a spread; check yours
Freddie Mac: no premium in the final 90 days
Fannie Mae: greater of 1% or YM
Step-down option (comparison)
Yield maintenance premium (estimate)
8.64% of the balance
Basis: Rate differential (yield maintenance)
- Months in the yield-maintenance period
- 57
- Present value factor
- 51.834
- Rate-differential formula
- $863,898
- Minimum (1% of balance)
- $100,000
If your loan has a step-down
$300,000 (3%)
Loan year 6 · $563,898 less than yield maintenance
Estimate only. The actual premium is defined by your Note and calculated by the servicer using the Treasury yield on a specific date, so it can differ from this figure. Ask your servicer for a payoff quote.
Formula used: the greater of the minimum and balance × (note rate ÷ 12 − Treasury yield ÷ 12) × present value factor, compounded monthly.
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Related loan programs
The numbers on this calculator play out differently by program. These are the executions that usually apply.
- Agency stabilized (Fannie Mae / Freddie Mac) Fixed-rate agency debt for stabilized 5+ unit apartments.
- Freddie Mac Optigo Freddie Mac multifamily loans placed through the Optigo lender network.
- Freddie Mac Conventional Small Fixed-rate Optigo loans for 5–50 unit properties, generally $2M–$10M.
- Fannie Mae Small Loan Fannie Mae execution for smaller multifamily loan balances.
- HUD 223(f) FHA-insured purchase or refinance of existing multifamily, up to 35 years.
- Bridge / value-add Short-term floating debt for transitional and value-add business plans.
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What these numbers mean.
How yield maintenance works
When you repay a fixed-rate loan before the open period, the lender loses the interest it expected at your note rate. Yield maintenance charges the present value of that shortfall against a Treasury yield. The calculator uses:
- Premium = the greater of the minimum and Balance × (Note rate ÷ 12 − Treasury ÷ 12) × PVF
- PVF = (1 − (1 + r)−n) ÷ r, with r = Treasury yield ÷ 12 and n = months left in the yield-maintenance period
- Minimum = 1% of the balance by default. Fannie Mae's Guide describes the premium as generally the greater of 1% of the unpaid principal balance or yield maintenance (Multifamily Guide, Part V, Section 213.02)
- Open window = months before maturity with no premium. Freddie Mac's Optigo fixed-rate term sheet lists no premium in the final 90 days (fixed-rate term sheet)
This is a monthly present-value form using the Treasury yield ÷ 12. Lenders' exact formulas vary (Treasury selection, compounding and spread differ by Note), and Fannie Mae publishes its own worked prepayment example for comparison. Use the Treasury yield for a maturity that matches the months left, from the U.S. Treasury daily yield curve. Your Note defines the exact Treasury security and date.
Worked example: $10,000,000 loan, 5 years from maturity
Balance $10,000,000, note rate 6.00%, Treasury yield 4.00%, 60 months to maturity, 3 open months (so 57 months of yield maintenance).
- PVF ≈ 51.834
- Rate-differential premium ≈ $10,000,000 × (0.06 ÷ 12 − 0.04 ÷ 12) × 51.834 ≈ $863,898 (8.64% of the balance)
- The 1% minimum is $100,000, so the formula amount governs
- On a 10-year Fannie Mae declining schedule, loan year 6 is 3%, or $300,000
If the Treasury yield rose to the 6.00% note rate, the formula would be zero and the 1% minimum ($100,000) would apply.
Step-down structures
Fannie Mae's declining prepayment premium option, as published by lender Lument, uses 5-4-3-2-1 on a 5-year term, 5-4-3-2-1 after a 2-year lock-out on a 7-year term, and 5-5-4-4-3-3-2-2-1-1 on a 10-year term. Freddie Mac's Conventional Small term sheet says step-down and yield maintenance without defeasance are available at an additional cost (term sheet). Pick a preset above or enter your own schedule.
Plan the exit before you close
Prepayment terms change what a loan really costs. Compare products in agency vs bridge and fixed vs floating, model the payment and balloon with the multifamily mortgage calculator, and read rate risk and refinance planning.
Turn calculator output into a debt structure and lender match.