lostinthenumbers
New member
- Joined
- Sep 12, 2019
- Messages
- 5
I am offered a commercial real estate loan by two banks, A/B. Bank A is an existing Bank (offering a refinance) and B is a new bank. The amount bank A is offering is $10,000,000 and B is $10,200,000. Both terms are a 10 year fixed rate and 25 year amortizations. However, A is offering 4%, and B is offering 3.00%.
Issue:
If I pay off Bank A, there is a $200,000 pre payment penalty. That is why B is a higher dollar amount, but is offering a lower rate to offset the payment (not actual amounts to illustrate). The $200,000 is also "tax deductible" at my current 37% tax rate of the LLC I own if I pay-off with a new bank. How can I "estimate" what Bank B's "real interest rate" is, if I have a tax benefit over the other offer? Thank you for the complex question help.
Issue:
If I pay off Bank A, there is a $200,000 pre payment penalty. That is why B is a higher dollar amount, but is offering a lower rate to offset the payment (not actual amounts to illustrate). The $200,000 is also "tax deductible" at my current 37% tax rate of the LLC I own if I pay-off with a new bank. How can I "estimate" what Bank B's "real interest rate" is, if I have a tax benefit over the other offer? Thank you for the complex question help.