Assume the seller's CMBS loan, or get a new one?
By Brad Beattie, Director, Capital Markets, Janover Capital LLC · Published
CMBS loans maturing in 2030 have a median note rate of 5.63%, against 6.63% for loans securitized in the last 90 days. Assuming an older loan keeps that rate, but the buyer pays an assumption fee and often more equity. This calculator compares the two over the loan's remaining term.
Worked example
A buyer pays $30,000,000 for a property with an $18,000,000 interest-only CMBS loan at 5.63% (the median rate of CMBS loans maturing in 2030) and 47 months left. The alternative is a new interest-only loan of $20,181,000 (67.3% of the price) at 6.45%, the recent multifamily median. With no fee or costs entered:
| Assume | New loan | |
|---|---|---|
| Cash at closing | $12,000,000 | $9,819,000 |
| Monthly payment | $84,450 | $108,473 |
| Total cash, all in | $33,969,150 | $35,098,225 |
Over the 47 months, assuming costs less by $1,129,075, though assuming needs $2,181,000 more cash at closing. Assuming stays cheaper as long as the assumption fee and other assumption costs come to less than $1,129,075, which is 6.27% of the balance. Your loan agreement sets the fee.
Formulas
Cash at closing (assume) = price − existing balance + assumption fee + other costs Cash at closing (new) = price − new loan + new loan costs Total cash, all in = cash at closing + every payment over the term + balance still owed at the end Saving = total (new) − total (assume) (positive: assuming costs less) Present value = the same flows discounted monthly at the new loan's rate
Both paths run for the existing loan's remaining months and end owing their remaining balances, so the totals cover the same stretch of time. Payments use a 30/360 month (rate ÷ 12) for both loans; an Actual/360 loan pays slightly more interest in long months, the same for both.
Sources
- BANK5 2025-5YR14 prospectus (Form 424B2, filed 2025-04-02). "Due-On-Sale and Due-On-Encumbrance Provisions", p. 225: assumption conditions; the assumption fee is never paid to certificateholders; some loans allow transfers without a fee.
- BANK5 2025-5YR14 Pooling and Servicing Agreement, dated as of April 1, 2025 (Form 8-K, Exhibit 4.1, filed 2025-04-02). Section 3.11(a) and (c), pp. 199-202: which servicer keeps assumption fees and assumption application fees.
- SEC EDGAR Form ABS-EE asset-level data (Schedule AL) for CMBS trusts, as compiled by cmbs.news. Median note rate of loans maturing in 2030 (2026-10-28); recent note rates and LTV by property type.
Related: how a CMBS loan assumption works, selling a property with a CMBS loan, supplemental financing, defeasance calculator.
Questions people ask
Can a buyer assume a CMBS loan?
Usually, with the servicer's consent. The prospectus for BANK5 2025-5YR14 lists the usual conditions: no default, a creditworthy and experienced buyer, rating agency confirmation, an assumption agreement with legal opinions and title endorsements, and payment of the assumption fee.
How much is a CMBS assumption fee?
The loan agreement sets it, often as a percentage of the balance, and some loans allow a set number of transfers with no fee. The pooling and servicing agreement does not set the amount; it decides which servicer keeps it. No figure is prefilled here: enter the one in your loan documents.
Who gets the assumption fee?
Not the bondholders. In BANK5 2025-5YR14 the master servicer keeps the fee on a performing loan it handles, half goes to the special servicer when the assumption is a Major Decision, and the special servicer keeps all of it on a specially serviced loan (PSA section 3.11(a) and (c)).
When is assuming better than a new loan?
When the existing rate is well below today's and enough term is left for the savings to outweigh the fee, the costs, and the extra equity a smaller existing balance may require. A new loan wins when you need more leverage, a longer term, or the freedom to prepay.
Does the buyer have to put in more equity to assume?
Often. The existing balance has been set by the original underwriting and any amortization since, so it may be lower than the loan a buyer could get today. The difference comes from equity, or from supplemental financing if the loan documents allow it.
Buying a property with a CMBS loan on it?
Janover Capital LLC can price new acquisition financing against the assumption, and supplemental debt if the loan allows it. We are a commercial mortgage advisor, not a lender.