Loan Modification Savings Calculator

Loan mods save real money. This calculator sizes monthly and NPV savings.

Current balance

Current rate

New rate

Current term (yrs)

New term (yrs)

Monthly savings

$40,388

Current payment

$177,253

New payment

$136,866

How the math works

Calculate amortized payment at current and new terms. Savings = current − new.

Rate-reduction modifications often involve a small principal pay-down as a lender concession. A $500k paydown to secure a 200 bps rate cut on a $18M loan saves $360k/year — 72% ROI in year one. Run the math before dismissing the lender's ask for paydown.

How to Use

Enter current balance.
Enter current rate %.
Enter new rate %.
Enter current remaining term.
Enter new term.
Read monthly and NPV savings.

Frequently Asked Questions

Modification types?

Rate reduction (most valuable). Term extension (lower payment, higher lifetime interest). Principal forgiveness (rare — often requires carve-out). Arrears capitalization (adds past-due to balance). Each different economic trade-off.

When lenders agree?

Distress scenarios (foreclosure alternative). Workout vs special servicer referral. COVID-era flexibilities. Lenders prefer modification to foreclosure if asset value > loan. Modifications below-market only when distressed outcome worse.

Borrower cost?

Legal $8-40k. Appraisal $3-15k. Lender modification fee 0.5-2% of balance. Sometimes reserves required post-mod. Budget 1-3% of balance all-in transaction cost.

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.