Rate Lock Renegotiation Cost Calculator

Renegotiating rate lock costs breakage.

Loan balance

Original locked rate %

Current rate %

Remaining lock days

Breakage fee %

Total renegotiation cost

$90,000

Breakage fee

$90,000

Net savings (loan life)

$855,000

How the math works

Breakage = balance × %. Annual savings = balance × rate diff. Net = savings × assumed years − breakage.

$18M × 0.5% = $90k breakage. $18M × 0.75% × 7 = $945k savings. Net +$855k — renegotiation worth it.

How to Use

Enter loan balance.
Enter original locked rate %.
Enter current rate %.
Enter remaining lock days.
Enter breakage fee %.
Read renegotiation cost.

Frequently Asked Questions

When needed?

Locked rate became above market after lock date. Borrower wants to break and re-lock at lower rate. Lender charges breakage — difference in PV of locked vs market rate over remaining term + admin.

Typical cost?

Breakage 1-5% of loan balance depending on rate differential and time remaining. Small rate drop + short remaining: minimal cost. Large drop + long remaining: material cost. Often not worth renegotiating below 25-50 bps move.

Alternatives?

Wait for takeout date. Accept locked rate. Terminate loan (if not yet closed). Some lenders won't re-lock; have to commit to original. Each has trade-offs depending on market direction.

How does this interact with the rest of the capital stack?

Each tier of the stack affects the next. Senior debt constrains LTC and DSCR. Mezz and pref consume equity spread. Interest rate hedges protect DSCR but cost premium. Always model the full stack holistically — optimizing one tier alone often degrades another. Institutional underwriters run three or four scenarios across the stack before committing capital.