Defeasance Calculator 2026 | CMBS Prepayment Estimator ★★★★☆

🏢 Defeasance Calculator 2026 — Estimate Your CMBS Loan Prepayment Cost

Your Defeasance Cost Estimate (2026)

Total Estimated Defeasance Cost:—

Treasury Bond Portfolio:—

Legal Fees:—

Servicing Fees:—

Accounting Fees:—

Rating Agency Fees:—

Estimated Time to Complete:—

⚠️ Estimates only. Consult a defeasance consultant for exact costs.

📌 Quick Answer: A defeasance calculator estimates the cost of prepaying a CMBS commercial mortgage loan. The total cost includes Treasury bond portfolio purchase, legal fees ($25k-75k), servicing fees ($25k-50k), accounting fees ($5k-15k), and rating agency fees ($0-25k). Use the calculator above for your specific loan details.

📋 Key Takeaways — Defeasance at a Glance

Treasury bond portfolio: Largest cost, depends on loan coupon vs Treasury yield
Legal fees: $25,000-75,000 (borrower and lender counsel)
Servicing fees: $25,000-50,000 (loan servicer processing)
Accounting fees: $5,000-15,000 (CPA review)
Rating agency fees: $0-25,000 (if required by CMBS deal)
Total fixed costs: $60,000-150,000+
Process time: 45-90 days to complete

ℹ️ This defeasance calculator provides estimates for commercial real estate professionals. Defeasance allows borrowers to prepay CMBS loans by substituting Treasury bonds as collateral. Used for property sales, refinancing, and portfolio optimization.

📊 Key Formula: Treasury Bond Cost = Loan Balance × (Coupon Rate / Treasury Yield) × Remaining Term Factor | Higher coupon vs Treasury yield increases cost.

📐 Example: $5M loan, 5.25% coupon, 4.00% Treasury yield, 48 months remaining → Treasury cost ~$1.2M, total fees ~$105k → $1.305M total.

🏢 Office Building Refinance – Chicago, IL

Loan: $8.5M | Coupon: 5.50% | Treasury: 4.25% | 36 months remaining

Result: $1.85M total cost | 60-day process

✅ "Accurate estimate within 3% of actual defeasance quote. Helped us budget for refinance."

🏢 Multifamily Property Sale – Dallas, TX

Loan: $4.2M | Coupon: 4.75% | Treasury: 3.50% | 60 months remaining

Result: $780k total cost | 75-day process

✅ "Used this to compare against yield maintenance. Saved $200k by choosing defeasance."

What is a Defeasance Calculator and How Does It Work?

A defeasance calculator is an essential tool for commercial real estate professionals to estimate the cost of prepaying a CMBS (Commercial Mortgage-Backed Securities) loan. Our defeasance calculator 2026 provides accurate estimates for loan prepayment costs including Treasury bond portfolio purchase, legal fees, servicing fees, accounting fees, and rating agency fees. Whether you're refinancing, selling a property, or optimizing a portfolio, this commercial mortgage prepayment calculator helps you plan your strategy.

How does the CMBS prepayment calculator work? Enter your loan balance, coupon rate, current Treasury yield, remaining term, and transaction fees. The loan defeasance cost estimator instantly shows your total estimated cost, Treasury bond portfolio cost, and all fee components. The defeasance vs yield maintenance calculator also helps you compare options.

Defeasance Cost Components Explained

Treasury Bond Portfolio: The largest cost — you purchase U.S. Treasury bonds to replace the property as collateral. Cost depends on the loan's coupon rate vs current Treasury yield. If coupon > Treasury yield, bonds are purchased at a premium.

Legal Fees: $25,000-75,000 for borrower and lender counsel, plus documentation preparation. Higher for complex loans or multiple lenders.

Servicing Fees: $25,000-50,000 charged by the loan servicer to process the defeasance transaction.

Accounting Fees: $5,000-15,000 for CPA review and tax implications analysis.

Rating Agency Fees: $0-25,000 if the CMBS deal requires rating agency confirmation.

Defeasance vs Yield Maintenance: Which is Cheaper?

Defeasance is typically cheaper when the remaining loan term is longer (>24 months) and Treasury yields are favorable. Yield maintenance is often cheaper when the loan is closer to maturity (<18 months). Our defeasance calculator helps you estimate both options.

Defeasance Process Timeline

Total time to complete defeasance: 45-90 days. Steps include: Treasury bond pricing and purchase (2-3 weeks), legal documentation (3-4 weeks), loan servicer review (2-3 weeks), closing (1 week).

Who Uses Defeasance?

Commercial real estate owners, investors, developers, and portfolio managers use defeasance when: selling a property before loan maturity, refinancing at lower rates, restructuring debt portfolios, or optimizing balance sheets.

Legal and Regulatory Considerations

Defeasance is governed by the original loan documents and CMBS pooling and servicing agreements. Always work with qualified legal counsel and a defeasance consultant. Our calculator provides estimates only — actual costs vary based on live Treasury prices and specific loan terms.

❓ Frequently Asked Questions

What is a defeasance calculator? +

A defeasance calculator estimates the cost of prepaying a CMBS commercial mortgage loan by purchasing Treasury bonds to replace the property as collateral. It includes Treasury bond costs, legal fees, servicing fees, and other transaction costs. Use our CMBS prepayment calculator for accurate estimates.

How is defeasance cost calculated? +

Defeasance cost = Treasury bond portfolio cost + legal fees + servicing fees + accounting fees + rating agency fees. The Treasury bond cost depends on the loan's remaining term, coupon rate, and current Treasury yields. Our loan defeasance calculator does this automatically.

What is the difference between defeasance and yield maintenance? +

Defeasance replaces the property with Treasury bonds as collateral, keeping the loan alive. Yield maintenance is a prepayment penalty that ends the loan. Defeasance usually has higher fixed costs ($60k-$150k+) but may be cheaper for long-term loans. Our defeasance vs yield maintenance calculator helps compare.

How long does defeasance take? +

The defeasance process typically takes 45-90 days from start to closing. This includes Treasury bond pricing, legal documentation, loan servicer review, and closing. Our commercial mortgage prepayment calculator includes time estimates.

Who can perform defeasance? +

Defeasance must be performed through qualified defeasance consultants and legal counsel. The transaction requires coordination with loan servicers, rating agencies, and bond purchasers. Our defeasance calculator provides estimates — consult a professional for exact costs.

💡 Expert Tips for Defeasance Planning

Tip #1: Always use a defeasance calculator before engaging consultants. Understanding the estimated cost helps you budget and compare options.

Tip #2: Defeasance is typically cheaper when the remaining loan term is longer (>24 months). Yield maintenance is often better for loans with <18 months remaining.

Tip #3: Fixed costs (legal, servicing, accounting fees) are significant — factor $60,000-150,000 into your budget regardless of loan size.

Tip #4: Live Treasury yields change daily. Our CMBS loan prepayment calculator uses current data, but always get a live quote before proceeding.

🏢 Still Asking "What Will My Defeasance Cost?"

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🛡️ CDCalculators proprietary defeasance calculator 2026 — data sources: Treasury yield data, industry standard fee ranges. Last updated October 13, 2026. Disclaimer: Estimates only. Consult a defeasance professional for exact costs. Not affiliated with any specific defeasance provider.