Loan Offer & Extension Cost Comparison
Which quoted loan costs less if the exit takes longer?
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Method reviewed October 25, 2026 · All prefilled amounts and rates are hypothetical examples. Replace them with supported project figures.
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Compare fully advanced interest-only offers at the same principal, including net funding, points, minimum interest, exit fees and permitted extension costs. Read the method and boundaries.
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Comparable written offers
Use a private reference. All rows and amounts below are illustrative until you replace them.
A lower rate can lose its advantage after an extension
Separate hypothetical illustration matching the prefilled offers: gross principal $500,000; Offer A has 12% initial interest, two points and $1,000 upfront fees, a nine-month term and one three-month extension at 13% plus one point. Offer B has 14% interest, one point and $1,000 fees with a 12-month term. Both have a three-month minimum and no entered exit fee.
| Payoff timing | Offer A cost | Offer B cost |
|---|---|---|
| Month 9 | $56,000 | $58,500 |
| Month 12 | $77,250 | $76,000 |
The extra extension interest and fee reverse the lower-cost result. Principal repayment is excluded from financing cost; compare net proceeds and loan conditions separately.
Method, assumptions and DC source boundaries
These equations are our planning analysis. Agency sources explain legal or supervisory context; they do not validate a property, approve a lender request or supply the fictional rates and prices above. Method version 2026-10-25.2.
- Use the same gross principal for offers funding the same project. This is a fully advanced, interest-only model. Upfront points and fees are withheld, so usable loan proceeds differ. It is unsuitable for staged draws, amortization, floating-rate resets or compounding default interest.
- Interest equals principal × nominal annual rate × months / 12, split at initial maturity. The entered minimum-interest floor equals original principal × initial rate × minimum months / 12; billed interest is the greater of this floor and timed interest. Enter a separately quoted payoff charge only if it does not duplicate that floor.
- Each started extension block incurs the full entered extension fee. Maximum blocks and extension rate are scenario terms you must verify; eligibility, consent and covenants are not granted by this tool. No complete cost or lowest-cost result is shown beyond entered maturity plus permitted extension capacity.
- Financing cost includes interest, upfront charges, extension fees and entered exit charges, excluding principal repayment. The payoff cash figure separately includes principal and exit charges; periodically paid interest is not charged again at payoff.
- Only offers marked reconciled with a modeled payoff within their entered term capacity enter the lowest-cost comparison. A lower modeled cost does not verify underwriting, funding reliability, collateral, recourse or legal terms. Net proceeds and the owner cash gap remain separate from cost.
Evidence to confirm
- Commercial Real Estate Lending, version 2.0Office of the Comptroller of the Currency · Context reviewed October 25, 2026 · Bank supervisory reference reviewed 2026-10-24, including March 2025 update note; not universal private-lender terms
Keep actual quotes, leases, tax/closing calculations, approval records and release conditions with your project. No automatic entitlement, valuation, savings or funding outcome is represented.