The coupon is the rate the borrower pays. The yield is what investors earn after the servicer, trustee, and other administrative fees are paid out of the coupon. The gap is typically 4 to 8 basis points on routine new-issue CMBS but can widen meaningfully on seasoned or distressed bonds.
Why does it matter to a borrower?
The borrower's all-in cost is the coupon, period. But the yield is what the lender uses internally to price the loan and what shows up in investor research. Borrowers who try to negotiate based on quoted yields are usually negotiating with the wrong number, focus on coupon, fees, and total dollar cost.
How does it interact with prepayment?
Yield maintenance on a CMBS loan is calculated from the remaining payments at the mortgage coupon, discounted at a Treasury reinvestment rate plus any stated spread. It is not calculated off the bond yield.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1