👋3 Ways To Calculate Interest

[Justin Goodin]

Commercial real estate lenders calculate interest on loans in three ways:

✔️ 30/360
✔️ Actual/365 (aka 365/365)
✔️ Actual/360 (aka 365/360)

Real estate underwriters should be aware of these 3 methods and understand which calculation the lender is using.

The differences can have a significant impact on the amount of interest paid over the life of the loan.

Similarly, it can also have an impact on the amount of cash flow that is available to be distributed to your investors.