Yield maintenance calculator
By Brad Beattie, Director, Capital Markets, Janover Capital LLC · Published
Yield maintenance is the greater of 1% of the amount prepaid and the present value of the interest you would have paid above the Treasury rate until maturity. That is the formula written into loan agreements in the BANK5 2026-5YR24 CMBS prospectus, filed with the SEC on August 20, 2026. This calculator runs it on the live Treasury curve.
Worked example
A $10,000,000 loan at 6.84% (the median note rate of CMBS loans securitized in Nov 2024) matures December 1, 2029. Prepaid on December 1, 2026, 36 monthly payments remain, 3.00 years. The interpolated Treasury on October 30, 2026 is 4.650%.
| Rate differential | 6.840% − 4.650% = 2.190% |
|---|---|
| Calculated Payment | $10,000,000 × 2.190% ÷ 12 = $18,249 |
| Discount rate | 12 × ((1 + 4.650% ÷ 2)^(1/6) − 1) = 4.606% |
| Present value of 36 payments | $612,513 |
| Minimum (1%) | $100,000 |
| Premium | $612,513 (6.13%) |
Under definition D (present value of every remaining payment at the Treasury yield ÷ 12, less the balance), the same loan comes to $612,105. The two differ mainly in the discounting convention.
Formula
YM = max( floor × A , Σ(k = 1..n) C ÷ (1 + j)^k ) A = amount prepaid C = A × max(0, note rate − T) ÷ 12 (the Calculated Payment) T = Treasury yield interpolated at the maturity date j = (1 + T ÷ 2)^(1/6) − 1 (monthly rate equal to T compounded semiannually) n = monthly payments from the prepayment date to maturity (or the open date) floor = 1% in the agreements quoted
Seven of the nine definitions in the filing are this interest differential; they differ in small ways (whether the payments run to maturity or to the open date, and definition G discounts at the Treasury yield itself rather than its monthly equivalent). Definition D discounts every remaining payment of principal and interest at a Treasury yield divided by 12 (the single Treasury maturing closest to the open date; the calculator uses the interpolated yield), subtracts the balance, and applies the same 1% minimum. For an interest-only loan that equals the differential discounted at T ÷ 12, a little higher than definition B.
Why the Treasury matters so much
The premium is the lender's lost spread over Treasuries for the rest of the term. Every 0.25% drop in the Treasury yield adds about 0.25% × A ÷ 12 to each month's payment, and with several years left that adds up quickly. When the Treasury rate reaches your note rate the differential is zero and the minimum applies. Run the same loan at a few Treasury yields to see the range before you set a sale or refinance date.
The agreements read H.15's weekly average for the week before the prepayment. H.15's constant maturity yields come from the Treasury's own daily par curve, which is what this page reads, so the figure here tracks the one your servicer will use; on the day it can differ by the week's movement.
Sources
- BANK5 2026-5YR24 prospectus (Form 424B2, filed 2026-08-20). Footnotes to Annex A-1, "Yield Maintenance Premium", definitions A to I, pp. A-1-25 to A-1-26: the definitions of Yield Maintenance Premium, Calculated Payments, Discount Rate and Yield Maintenance Treasury Rate, and the 1% minimum.
- BANK5 2025-5YR14 prospectus (Form 424B2, filed 2025-04-02). "Voluntary Prepayments", p. 224: loans prepayable with the greater of a Yield Maintenance Charge or Prepayment Premium; open periods of 4 to 7 payments.
- Federal Reserve Statistical Release H.15, Selected Interest Rates. The Treasury constant maturities the agreements name.
- U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates. The daily par yield curve this page reads.
- SEC EDGAR Form ABS-EE asset-level data (Schedule AL) for CMBS trusts, as compiled by cmbs.news. Example note rate: median of loans securitized in Nov 2024.
Related: how yield maintenance works, defeasance calculator, CMBS prepayment penalties, compare loan offers.
Questions people ask
How is yield maintenance calculated on a CMBS loan?
The BANK5 2026-5YR24 prospectus prints 9 yield maintenance definitions from its loans' agreements, and 7 of them use the same idea: the greater of 1% of the amount prepaid and the present value of the interest you would have paid above the Treasury rate. Each month counts the prepaid amount times (note rate minus Treasury rate) ÷ 12, to maturity or the open date, discounted at that Treasury rate.
Which Treasury rate is used?
The agreements quoted here use the Federal Reserve H.15 Treasury constant maturity yields for the week before the prepayment, interpolated between the two maturities that bracket the loan's maturity date (or open date). This calculator uses the latest daily reading of the same Treasury par curve and interpolates the same way.
Is there a minimum yield maintenance charge?
In all 9 definitions in that filing, yes: 1% of the amount prepaid. When Treasury yields are at or above your note rate, the differential is zero and the 1% minimum is what you pay. Other agreements can set other minimums, so check yours.
Is yield maintenance cheaper than defeasance?
Both replace the lender's lost interest at Treasury yields, so the core cost is built the same way. Yield maintenance is one cash payment with no successor borrower or securities to buy, so it carries fewer transaction costs. Defeasance can cost less than the balance when Treasury yields are above your rate; yield maintenance never drops below its minimum.
When does yield maintenance stop?
At the open period your loan agreement sets, usually the last few months before maturity. In BANK5 2025-5YR14 open periods run from 4 to 7 payments. After that you can prepay at par.
Paying off to refinance?
Janover Capital LLC can price the new loan against the prepayment cost, so the date you choose works. We are a commercial mortgage advisor, not a lender.