What does EIR mean in loan?
The actual cost of your loan is reflected in the Effective Interest Rate (EIR), which can surpass the promoted rate due to the methodology employed for interest calculation.
What is the EIR method of loan?
In accounting, the effective interest rate method scrutinizes the correlation between an asset's carrying value and its associated interest. In the context of lending, the effective annual interest rate may pertain to an interest computation where compounding occurs at a frequency exceeding once per year.
What does EIR stand for?
What constitutes an EIR, and in what circumstances is it necessitated? An Environmental Impact Report (EIR) is a comprehensive document authored by the lead agency, which delineates and evaluates the substantial environmental consequences of a proposed project, identifies potential alternatives, and deliberates on strategies to mitigate or avoid potential environmental harm.
What does EIR stand for in finance?
The effective interest rate (EIR), also known as the effective annual interest rate, annual equivalent rate (AER), or simply the effective rate, represents the percentage of interest charged on a loan or financial product when compound interest accumulates over periods shorter or longer than a year.
How to calculate EIR?
Effective annual interest rate = (1 + (nominal rate ÷ number of compounding periods))(number of compounding periods) – 1. Investment A = (1 + (10% ÷ 12 ))12 – 1.
Commercial Loan Programs - IRE Capital
Interest Rates for Commercial Building Loans Exceeding $1,000,000
These financing options typically provide lower interest rates compared to portfolio-based programs. However, they may not be as aggressive as rates offered by life insurance companies, conduit lenders, or secondary market loans. Additionally, they usually feature non-restrictive prepayment penalties and associated costs.
Terms and Interest Rates for Commercial Building Loans
3-Year Fixed Rate:
Ranges from 4.5% to 5.00%, with adjustments after three years at 2.35% above the 12-month average treasury index.
5-Year Fixed Rate:
Ranges from 4.7% to 5.1%, with adjustments after five years at 2.35% above the 12-month average treasury index.
7-Year Fixed Rate:
Ranges from 4.75% to 5.125%, with adjustments after seven years at 2.35% above the 12-month average treasury index.
10-Year Fixed Rate:
Ranges from 4.9% to 5.275%, with adjustments after ten years at 2.35% above the 12-month average treasury index.
15-Year Fixed Rate:
Ranges from 4.75% to 5.375%, with adjustments after fifteen years at 2.35% above the 12-month average treasury index. (Note: 15-year fixed-rate loans generally require a 15-year term and amortization schedule.)
Purchase loans are available up to a loan-to-value (LTV) ratio of 70%, and refinancing with cash-out options up to 65% LTV, subject to a debt service coverage ratio (DSCR) of 1.25-1.35 times the annual net operating income. The borrower's financial strength, the leverage of the subject property, and the lease terms of the property are factors considered in determining the LTV, interest rate, and loan terms.
The majority of these loan types feature decreasing prepayment penalties, and interest rates vary by program, based on factors such as LTV, DSCR, and the age and structure of the building.
Please note that interest rates fluctuate daily and can be locked once the complete loan application package is accepted.