Finance category
Mortgage, loan, investing, tax, and money calculators.
Default Interest Calculator
Default interest accrues at a higher rate. This calculator sizes extra accrual during default.
Extra default interest
$85,333
Total interest accrued
$224,000
Default rate
10.50%
How the math works
Default interest = balance × default rate × (months / 12). Extra = default − note rate × balance × time.
Cure fast. A $3M loan at 4% default spread for 12 months = $120k extra in interest alone. Plus servicing fees, late fees, legal. Cure cost vs accrual cost typically favors cure.
How to Use
- Enter loan balance.
- Enter note rate.
- Enter default spread.
- Enter months in default.
- Read default interest.
Frequently Asked Questions
Typical spread?
Note rate + 3-5% during default. Capped at state usury limits. Disclosed in loan docs; know before signing.
Compounding?
Some loans compound default interest; others accrue flat. Compounding = meaningfully more after 12 months. Read fine print carefully.
Negotiable?
Yes at origination — good borrowers negotiate 2% default spread vs standard 4%. Hard to negotiate after default is in motion; lender has leverage.
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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