IO To Amortization Transition Calculator

IO-to-amort shifts payments. This calculator sizes jump.

Loan amount

Rate %

IO years

Amortization years

Payment jump %

32.91%

IO monthly payment

$58,333

Post-IO monthly payment

$77,530

How the math works

IO payment = loan × rate/12. Amort payment = standard amortization formula over remaining term.

$10M at 7% with 5-yr IO then 20-yr amort: IO $58.3k/mo, amort $77.5k/mo. 33% jump at transition. Stress-test DSCR at amort payment before signing IO loan.

How to Use

Enter loan amount.
Enter rate %.
Enter IO years.
Enter amortization years.
Read IO payment, post-IO payment, and jump.

Frequently Asked Questions

Why IO?

Lower payments during value-add period. Preserves cash for stabilization capex. Lender concession for strong sponsors. CMBS often 1-5 years IO. Multifamily new construction: 2-3 year IO during lease-up standard.

Payment jump?

Typical jump: 40-80% on 30-year amort after 5 years IO. On $10M loan at 7%: IO payment $58k/month, amort payment $83k/month = 43% jump. Must plan cash flow to absorb. Stress test at amort payment, not IO.

Risk at reset?

DSCR compresses dramatically. Loan covenants can trigger. Cash flow tightens. Some CMBS have soft covenants that activate at amort start. Plan refinance, capital call, or asset stabilization to exceed amort coverage before the transition.