The all-in rate is the borrower's total annual cost of debt: note rate plus servicing fee , plus amortized origination over the term, plus any embedded administrative charges, expressed as a single percentage. It is the only fair way to compare two term sheets that quote the same note rate but carry different fees and servicing.
Why is note rate not enough?
Two lenders can quote 6.25% note rates but produce very different all-in costs. Lender A may include servicing in the rate while Lender B charges 15 basis points separately. Lender A may charge 0.75% origination versus Lender B at 1.25%. Over a 10-year term those differences move the comparison meaningfully.
How do you build an all-in calculation?
Take the note rate, add the explicit servicing fee, add origination amortized over the loan term, and add any recurring administrative or trustee fees. For floating-rate loans, add the rate-cap cost amortized over the cap term. For loans with exit fees, amortize the exit cost over the expected hold period.
Where do borrowers get tripped up?
Forgetting the rate cap on bridge debt, ignoring the upfront origination on a small-balance loan, and not normalizing for prepayment-flexibility differences. A loan with open prepay carries optionality that a defeased loan does not, the all-in comparison should reflect that.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Multifamily Market Commentary · Fannie Mae Economic & Strategic Research · 2026-Q1