Maturity Payoff Gap Calculator

Ballooning loans at maturity can exceed available proceeds. This calculator sizes the refinance gap and equity requirement.

Maturing loan balance

Projected property value

New loan max LTV %

Fees + reserves

Payoff gap

$975,000

New loan proceeds

$14,300,000

Net proceeds after fees

$14,025,000

How the math works

Gap = maturing balance − (new loan proceeds − fees). Positive gap = cash needed. Negative = cash-out.

Gaps often emerge from simultaneous value and LTV compression. Stress-test with 10% value haircut and 5-point LTV tightening before committing refi timing — this is the discipline that avoids forced sales.

How to Use

Enter maturing loan balance.
Enter projected property value.
Enter new loan max LTV.
Enter estimated fees and reserves.
Read the gap.

Frequently Asked Questions

What drives the gap?

Three forces: property value declines, tighter LTV underwriting, and cash-to-close requirements (fees, interest reserves, tax escrows). Any one can create a gap on an otherwise healthy deal.

How big a gap is fixable?

Sub-5% gaps: rate buydown, partial preferred equity, or sponsor top-up. 5-15%: bring in equity partner or mezz. 15%+: consider discounted payoff, DPO, or note sale before maturity date.

Warning signs?

Rising rates compressing DSCR, flat/declining NOI, or regional cap rate expansion. Start the refi conversation 9-12 months pre-maturity to avoid default-rate forbearance pressure.

When does a lender negotiate vs foreclose?

Lenders calculate their net recovery from foreclosure (asset value minus legal, time, and sale costs) and compare to any workout proposal. If your offer nets the lender more than foreclosure, and you present it with clear sources of capital, most lenders will engage. Bring a credible sponsor, documented sources, and a timeline — vague asks get declined. Build the relationship before distress, not after.