Fully Amortizing Loan
Quick answer
A fully amortizing loan repays all principal and interest through scheduled payments, leaving no balloon balance at maturity.
Each payment on a fully amortizing loan covers interest plus a slice of principal, sized so the balance reaches zero on the final payment date. Most commercial real estate debt is not fully amortizing — it amortizes on a longer schedule than its term and leaves a balloon — so a fully amortizing structure is a meaningful feature for owners who intend to hold a property long term.
Related product: Permanent Debt
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