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Spread Lock Calculator

Spread lock guarantees the spread (not absolute rate) over an index at closing. This calculator estimates the lock fee and evaluates value vs rate movement risk.

$
%

Lock fee

$40,000

Value locked in (bps)

25

Annual savings vs expected

$25,000

How the math works

Spread lock = fixed margin over index regardless of market spread movement. Fee pays for lender's risk of spread widening during lock period.

Sound when you have a spread view — if you think spreads will widen, lock now. If you think they'll tighten, don't. Most commercial locks get exercised when spreads widen.

How to Use

  1. Enter loan amount.
  2. Enter spread at lock.
  3. Enter expected spread at commitment.
  4. Enter lock period days.
  5. Read lock fee and break-even movement.

Frequently Asked Questions

When is spread lock used?

CMBS, life insurance permanent, agency multifamily. Borrower locks spread to Treasury/SOFR; index moves with market, so final rate isn't fixed — but spread is.

Typical fee?

0.25-0.50% of loan for 30-60 day lock. Longer locks (90-180 days) cost 0.75-1.50%. Fee paid upfront and often forfeitable if deal falls through.

Better than full rate lock?

Cheaper than full rate lock (which also locks index). Rate lock costs 1-3%. Spread lock is cheaper because borrower still bears index risk.

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