Loan Extension Option Cost Calculator

Extension options extend runway at cost.

Loan balance

Extension fee %

Rate increase bps

Extension months

Total extension cost

$200,000

Extension fee

$100,000

Rate increase cost

$100,000

How the math works

Fee = balance × %. Rate increase cost = balance × bps × months/12. Total = sum.

$20M × 0.5% = $100k fee. + 50 bps × 1yr = $100k rate cost. Total $200k for 1-year extension.

How to Use

Enter loan balance.
Enter extension fee %.
Enter rate increase bps.
Enter extension months.
Read total extension cost.

Frequently Asked Questions

Option mechanics?

Pre-negotiated right at origination: 1-2 six-month or twelve-month extensions at defined fee + rate. Borrower-controlled during options; lender-discretionary thereafter. Value preserved for borrower facing takeout risk.

Typical cost?

Fee: 25-100 bps of balance per extension. Rate premium: 25-100 bps during extension. 12-month extension: 0.25% fee + 50 bp rate = 0.75% total cost. Cheap insurance vs distressed refi.

When to exercise?

Takeout delay (stabilization slipping). Better refi rates expected (wait for rate cut). Bridge to sale (sale timeline extending). Value-add timing. Exercise is cheap vs alternatives — almost always right when available.

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.