Know Your Exit Cost.
Before You
Make the Call.
The CRELYTIC Defeasance Calculator estimates prepayment costs with Treasury rate modeling, yield maintenance comparison, and cost-timing breakeven analysis — so you can evaluate refinancing and disposition economics with confidence.
What Sets Defeasance Calculator Apart
Five capabilities working together to give you complete prepayment cost visibility.
Defeasance Cost Estimation
Calculate the total defeasance cost as the present value of remaining scheduled debt service payments, discounted against a matched portfolio of U.S. Treasury securities. The calculator factors in outstanding balance, coupon rate, amortization schedule, and maturity date to produce an accurate cost estimate — expressed both as a dollar amount and as a percentage of the current loan balance.
Defeasance cost is not a fixed penalty — it fluctuates with Treasury yields. A 50 basis point move in the 5-year Treasury can shift your prepayment cost by hundreds of thousands of dollars on a $20M loan.
Treasury Rate Modeling
Input current Treasury yields across the full curve — from the 1-year through the 10-year — to build the securities portfolio that would replace your loan's cash flows. The calculator uses these rates to price each Treasury strip individually, giving you granular visibility into how rate movements at each maturity point affect your total defeasance cost.
Unlike flat-rate estimates, this approach models the actual shape of the Treasury curve. An inverted curve produces materially different defeasance costs than a normal curve — your estimate should reflect that.
Yield Maintenance Comparison
See defeasance and yield maintenance costs side by side for the same loan and prepayment date. The calculator computes yield maintenance as the present value of the interest rate differential over the remaining term, then displays both options so you can evaluate which prepayment method is more economical given current market conditions.
Defeasance and yield maintenance can differ by six figures on the same loan. The cheaper option depends on the rate environment — this comparison removes the guesswork.
Cost-Timing Breakeven Analysis
Visualize how your prepayment cost changes over time with an interactive breakeven chart. The calculator models defeasance costs at each remaining payment date, showing you exactly when the cost drops below a target threshold and when prepayment becomes economically viable. Use this to time your refinancing or disposition for maximum savings.
A borrower 18 months from maturity may find defeasance costs dropping rapidly as remaining cash flows shrink. The breakeven chart shows you the optimal window — not just today's cost, but tomorrow's.
Securities Portfolio Breakdown
View the complete Treasury securities portfolio required to defease your loan — broken down by maturity date, par value, coupon, and market price. Each security is matched to a specific scheduled debt service payment, so you can see exactly which Treasuries cover which loan payments and how the portfolio is structured across the yield curve.
The portfolio breakdown is what your defeasance consultant would deliver — except you can model it instantly, adjust inputs, and re-run scenarios without waiting days for a formal quote.
See It In Action
Interactive preview with sample data
Defeasance Cost
$1.24M
estimated total cost
% of Balance
3.2%
of outstanding loan
vs Yield Maintenance
-$180K
savings over yield maint.
▲ 12.7% lower cost
Remaining Months
42
to loan maturity
Prepayment Cost vs. Timing
Defeasance cost decreases as maturity approaches
Securities Portfolio Breakdown-- U.S. Treasury matching by maturity
| Treasury Maturity | Rate (%) | Estimated Cost ($) |
|---|---|---|
| 1-Year Treasury | 4.25% | $142,000 |
| 2-Year Treasury | 4.10% | $218,000 |
| 3-Year Treasury | 4.05% | $286,000 |
| 5-Year Treasury | 4.15% | $344,000 |
| 7-Year Treasury | 4.20% | $198,000 |
| 10-Year Treasury | 4.25% | $52,000 |
| Servicer Fee | — | $25,000 |
| Legal / Consultant | — | $18,000 |
| Total | $1,283,000 |
Built for Every Seat at the Table
From borrowers to advisors — the Defeasance Calculator adapts to your role.
For Borrowers
You're considering refinancing a $25M CMBS loan with 3 years remaining and need to know whether the savings from a lower rate justify the prepayment cost. The Defeasance Calculator models your exact cost today, compares it to yield maintenance, and shows you how that cost changes month by month — so you can decide whether to prepay now, wait 6 months, or hold to maturity.
For Disposition Teams
Your fund is evaluating the sale of an office asset encumbered by a defeased loan. The buyer wants to know the exact prepayment cost that will hit the closing statement. You model the defeasance cost at the target closing date, layer in servicer and legal fees, and deliver a precise number — not a rough estimate — to your investment committee and the buyer's counsel.
For Lenders
A borrower has requested a prepayment quote on a $40M loan in your portfolio. Instead of waiting 3 business days for the servicer's formal quote, you run the calculator with current Treasury rates and the loan's payment schedule to produce an internal estimate within minutes — giving your team a head start on the borrower conversation and risk assessment.
For Advisors
Your client is weighing two exit strategies: sell the property and defease the loan, or refinance into a floating-rate bridge. You model the defeasance cost at multiple potential closing dates, compare it to the yield maintenance alternative, and present a clear cost-benefit analysis — all in one meeting, not after a week of back-and-forth with consultants.
Platform Capabilities
Frequently Asked Questions
Common questions about the CRELYTIC Defeasance Calculator and commercial mortgage prepayment analysis.
What Is Defeasance in Commercial Real Estate?
Defeasance is a process that allows a commercial real estate borrower to prepay a fixed-rate mortgage by substituting a portfolio of U.S. Treasury securities that replicate the remaining loan payment schedule. Unlike yield maintenance (which is a cash penalty paid to the lender), defeasance involves purchasing actual government bonds that are placed in a trust to make the remaining debt service payments on behalf of the borrower. The original collateral property is then released from the mortgage lien.
The cost of defeasance depends on the relationship between current Treasury rates and the loan's coupon rate. When Treasury rates are lower than the loan rate, defeasance costs more because the replacement securities must be purchased at a premium to generate sufficient cash flows. When rates are higher, defeasance can be significantly cheaper — sometimes even resulting in a net benefit to the borrower.
A defeasance calculator estimates this cost by modeling the remaining loan payment schedule, matching it against current Treasury yields across the relevant maturities, pricing the required securities portfolio, and adding transaction fees (typically $50,000-$75,000 for legal, accounting, and intermediary costs). The CRELYTIC Defeasance Calculator does this automatically using real-time Treasury rate data, and also provides yield maintenance comparison and cost-timing breakeven analysis so borrowers can determine the optimal prepayment strategy and timing.
Common scenarios where defeasance calculations are critical include property sales where the buyer wants a clean title, refinancing to capture lower rates on a new loan, and portfolio restructuring where capital locked in one asset needs to be redeployed. The CRELYTIC calculator is free to use at crelytic.ai/defeasance-calculator with no signup required.
Related Tools & Resources
- Defeasance vs. Yield Maintenance — Compare prepayment strategies
- DSCR Calculator — Analyze debt service coverage
- Debt Dashboard — Monitor loan portfolio and covenants
- IRR Calculator — Model investment returns
Stop Guessing Your Prepayment Cost
Every day you delay a prepayment decision, Treasury rates are moving and your cost is changing. Whether you are refinancing, selling, or restructuring — the Defeasance Calculator gives you an accurate estimate in minutes, not days.