CMBS Loan Amortization: What You Need to Know
The vast majority of CMBS loans are not fully amortizing. Instead, most CMBS loans are partially amortizing, while others have partial-term interest-only periods, or are full-term interest-only loans. The fact that most CMBS financing is not fully amortizing means that borrowers typically face a large balloon payment at the end of their loan’s term. In most cases, they’ll refinance the CMBS loan to avoid paying the balloon, either with bank financing, a loan from a private lender, or even with another CMBS loan.