Apartment Loan Term Sheet Comparison Tool

Short answer

To compare apartment loan quotes, put them on the same basis: annual debt service, fees and other costs spread over your expected hold, and the prepayment terms if you sell or refinance early. This tool takes two to four quotes and shows annual debt service, effective annual cost, total cost over your hold and a flexibility note for each.

What this tool answers

Two lenders quote the same building. One rate is lower, the other loan has interest-only, a lower fee, or a prepayment penalty you could live with. The rate alone does not tell you which is cheaper, and it says nothing about which one lets you sell in year four without a large check.

This tool lines up two to four quotes and computes what each one costs over the years you expect to hold the loan, then notes the terms that limit you. It is built for owners of 5+ unit buildings holding term sheets and deciding which to sign.

Compare lender quotes

	Quote 1	Quote 2	Quote 3
Lender
Loan amount ($)
Rate (%)
Interest-only (months)
Amortization (years)
Term (years)
Lender fee (%)
Other costs ($)
Prepayment
Recourse

Years you expect to keep the loan

Lowest effective cost–

Effective cost spreads fees over your hold and counts interest-only periods. It does not price prepayment penalties: compare those in the Prepayment row.

How to use it

Take each number from the term sheet or quote letter. If a quote leaves something out, ask the lender in writing before you compare.

Loan amount. The amount quoted, which may differ between lenders if they sized differently.
Rate. The note rate. If it is quoted as an index plus a spread, use the index value on the quote date plus the spread, and note that it will move until you lock.
Interest-only months. The number of months of interest-only payments before amortization starts. Zero if none.
Amortization. The schedule that sets the payment once amortization starts, usually 25 to 30 years.
Term. Years until the loan matures and the balance is due.
Lender fee. Origination or application fee as a percent of the loan.
Other costs. Lender legal, third-party reports, rate lock deposits that are not refunded, and any broker fee, in dollars.
Prepayment type. Yield maintenance, defeasance, step-down (for example 5-4-3-2-1) or open. The prepayment section of the term sheet says which.
Recourse. Full recourse, partial, or non-recourse with standard carve-outs.
Upfront reserves. Cash the lender holds at closing for repairs, taxes, insurance or replacement reserves.
Expected hold. How many years you realistically plan to keep this loan before you sell or refinance. This is the input that changes the answer most.

Worked example

Say you are refinancing with a $5,000,000 loan, you expect to hold it five years, and you have three hypothetical quotes.

Quote A, a local bank: 6.10%, no interest-only, 25-year amortization, 5-year term, 1.0% fee, $15,000 of other costs, a 5-4-3-2-1 step-down prepayment, full recourse, no upfront reserves.
Quote B, an agency lender: 5.90%, 24 months of interest-only, 30-year amortization, 10-year term, 1.0% fee, $45,000 of other costs, yield maintenance, non-recourse with standard carve-outs, $60,000 of upfront reserves.
Quote C, a conduit lender: 5.75%, no interest-only, 30-year amortization, 5-year term, 2.0% fee, $25,000 of other costs, defeasance, non-recourse with standard carve-outs, $40,000 of upfront reserves.

	Bank	Agency lender	Conduit
Note rate	6.10%	5.90%	5.75%
Year-1 debt service	$390,257	$295,000	$350,144
Fees and costs	$65,000	$95,000	$125,000
Years of the hold the term covers	5	5	5
Effective annual cost	6.42%	6.35%	6.35%

Look at how much of the rate gap the fees close once they are spread over a five-year hold: the quote with the lowest rate also carries the highest fee. The interest-only period on Quote B changes the cash each month even though its rate sits in the middle. The flexibility notes matter as much as the cost rows. A quote with a ten-year term and yield maintenance can cost a lot to exit if you sell inside the hold, while a step-down penalty has a known, shrinking cost. Recourse is the other trade: the bank quote asks you to stand behind the whole loan personally.

What to compare besides rate

Fees and costs, spread over your hold

A 1% fee is 1% of the loan once, but it costs more per year on a short hold than a long one. That is why the tool divides fees and costs by your expected hold. Ask every lender for a full list of their costs: legal, reports, servicing setup, and any exit fee.

Interest-only

Interest-only months lower your payment early and raise cash flow, but you pay down nothing in that time. It also tends to help the loan size, since some lenders test coverage on the amortizing payment and others on the interest-only payment, so read how the term sheet defines it.

Prepayment

Yield maintenance and defeasance both compensate the lender for the interest it loses, so their cost rises when rates fall below your note rate. A step-down is a fixed percent that shrinks each year. Match the prepayment type to how sure you are about your hold. Our guide to prepayment penalties explains each.

Recourse

Non-recourse loans limit the lender to the property, except for carve-outs such as fraud or a voluntary bankruptcy filing. Full recourse puts your personal assets behind the loan. Read the carve-out list in each quote, since it differs between lenders. See bad-boy carve-outs.

Reserves and escrows

Upfront reserves are your cash, held by the lender. They come back over time or at payoff, but they reduce the proceeds you take home at closing. Ongoing monthly reserves reduce cash flow in the same way.

Rate lock

Ask when the rate locks, what it costs, and whether the deposit is refundable. A lower quoted rate that locks only at closing carries more risk than a slightly higher rate locked at application.

Extension options

On shorter-term loans, an extension option with set terms can be worth a lot if the market is difficult at maturity. Note any fee, rate change and conditions such as a minimum DSCR to qualify.

What this tool assumes

A fixed rate. Floating-rate quotes are modeled at the rate you enter, held constant. Real floating costs move with the index.
No prepayment cost inside the hold. If your hold is shorter than the term, the tool notes the prepayment type but does not price yield maintenance or defeasance, because that depends on future rates. Use the yield maintenance calculator or defeasance calculator for an estimate.
Reserves are a timing cost. Upfront reserves are shown but not counted as a cost, since they are your money held in escrow.
The quotes are firm. A quote is not a commitment. Terms can change after the appraisal and underwriting.

What to do next

If one quote is cheapest and has the flexibility you need, go back to that lender with written questions on anything unclear before you sign and pay a deposit.

If the cheapest quote is the least flexible, decide how confident you are in your hold period. Then ask the other lenders whether they can improve the term that is costing them: a lower fee, more interest-only, or a step-down instead of yield maintenance.

If you only have one quote, you have nothing to compare. Janover Capital LLC is not a lender; we compare quotes from many lenders. Use "get quotes on these numbers" or email desk@janover.co.

Take it offline

Prefer a spreadsheet you can save, send or change? The same math, with formulas you can see.

Excel

Lender term sheet comparison

Up to six quotes side by side: debt service, fees, balance at your hold date and effective annual cost from monthly cash flows.

Download Excel

Frequently asked questions

How do I compare two commercial loan quotes with different fees?

Spread each quote's fees and closing costs over the number of years you expect to hold the loan, and add that to the annual interest cost. On a short hold, a higher fee can outweigh a lower rate. On a long hold, the rate matters more. This tool does that math so both quotes sit on the same annual basis.

Is interest-only worth a higher rate on an apartment loan?

It can be, if you need the cash flow early, for example during a renovation or lease-up, or if it helps the loan size. You pay no principal during the interest-only period, so your balance at maturity is higher. Compare the total cost over your hold and the balance you will need to refinance, not just the monthly payment.

Which prepayment penalty is better, yield maintenance or step-down?

A step-down charges a fixed percent of the balance that falls each year, so the cost is known in advance. Yield maintenance and defeasance depend on rates when you prepay: they cost more if rates have fallen and less if rates have risen. If there is a real chance you sell or refinance early, the predictability of a step-down is often worth a slightly higher rate.

Should I accept a recourse loan to get a lower rate?

That is a personal risk decision. With full recourse, your personal assets back the loan if the property cannot repay it. Non-recourse loans limit the lender to the property except for carve-outs such as fraud or misapplied funds. Many owners will pay a slightly higher cost to avoid recourse, especially on larger loans or older buildings. Review recourse terms with your attorney.

Are upfront reserves a cost of the loan?

Not exactly. Reserves are your money held by the lender for repairs, taxes, insurance or future capital needs, and they are drawn down or returned over time. They do reduce the cash you take home at closing, so on a cash-out refinance they matter, but they are not a fee like origination or legal costs.