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Commitment Fee Economic Cost Calculator
Commitment fees cost on undrawn portion.
Total commitment fee
$175,000
Monthly fee
$7,292
Fee as %
0.00%
How the math works
Annual fee = undrawn × bps/10000. Monthly = annual / 12. Total = monthly × months.
$25M × 35 bps = $87.5k/yr. Over 24 months = $175k. 35 bps fee on undrawn.
How to Use
- Enter total loan commitment.
- Enter avg undrawn balance.
- Enter commitment fee bps.
- Enter months.
- Read total commitment fee.
Frequently Asked Questions
What's it for?
Lender holds capital for borrower's draw. Unused = lender opportunity cost. Commitment fee 25-50 bps on undrawn portion typical. Revolver, LOC, construction loans often use. Lender compensated for standby availability.
Typical rates?
Revolver: 25-35 bps. Line of credit (mid-market): 25-50 bps. Construction loan: 25-75 bps. Mezzanine: 50-100 bps. Paid monthly/quarterly. Calculated on avg daily undrawn balance.
Economic implication?
$50M construction loan, avg $30M undrawn, 50 bps: $150k/yr ($12.5k/mo). Borrower should draw aggressively vs hold undrawn — commitment fee expensive vs cost of capital.
How often should I rerun this?
Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.
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