Mezzanine Refi Gap Calculator

Mezz refi often leaves a gap — plan equity.

Property value

New senior LTV max %

Existing senior balance

Existing mezz balance

Refi costs

Equity gap required

$8,350,000

New senior max

$26,000,000

Total debt payoff

$34,350,000

How the math works

New senior max = value × LTV. Total payoff = senior + mezz + costs. Gap = payoff − new senior.

$40M × 65% = $26M new senior. Payoff $34.35M. Gap $8.35M equity needed — common outcome in post-2022 refis.

How to Use

Enter property value.
Enter max new senior LTV %.
Enter existing senior balance.
Enter existing mezz balance.
Enter refi costs.
Read equity gap required.

Frequently Asked Questions

Why the gap?

Mezz typically funded at 80-95% CLTV (senior + mezz). New senior-only refi caps at 60-75% LTV. Value decline + tightened lending = senior can't cover combined existing balance. Sponsor must fund equity gap or extend mezz or sell.

Typical gaps?

2022-23: high-leverage multifamily with CMBS + mezz at 85% CLTV: refi gap often 10-20% of value. $50M property with 85% debt ($42.5M): new refi at 65% = $32.5M. Gap $10M. Pervasive problem in late-2023 maturity wall.

Solutions?

Fresh equity from sponsor. Preferred equity/mezz replacement. Partial sale to bring leverage down. Loan modification with lenders (rare). Asset sale and redeployment. Each has cost — sponsor needs to model carefully.