The maturity date is the contractual date on which the outstanding principal balance of a CRE loan, plus any accrued interest and fees, becomes due in full. Unless the borrower has fully amortized the loan (rare in CRE), a balloon payment — the remaining unpaid principal — must be repaid at maturity, typically through refinancing with a new loan or proceeds from a property sale. If the borrower cannot repay or refinance at maturity, the loan is in maturity default, which gives the lender the right to exercise remedies including foreclosure. CRE loan terms range from 1-3 years (bridge loans) to 10-30 years (permanent loans), but 5-, 7-, and 10-year terms are the most common. The maturity date should not be confused with the amortization schedule, which is typically longer.
How It Works in Practice
Maturity risk is among the most significant risks in CRE debt management, and it has intensified as the industry faces a historically large “maturity wall” — hundreds of billions in CRE loans maturing into a higher interest rate environment. A borrower who financed a property at a 4% rate five years ago may face refinancing at 6.5% or higher, fundamentally changing the deal economics. If the new rate doesn’t support the same leverage, the borrower may need to inject equity to pay down the loan at maturity. For bridge loans with extension options, the maturity date depends on whether extension conditions are met — failing an extension test effectively accelerates your maturity. Portfolio managers must track maturity dates across every loan, model refinancing scenarios at current and projected rates, and begin planning refinancing strategies 12-18 months before maturity. LoanBoss provides portfolio-wide maturity tracking, including extension eligibility analysis and refinancing scenario modeling, so you can plan your capital needs well in advance.
Related Terms
Part of the LoanBoss CRE Debt Glossary. For hedging-specific terms, see Pensford’s resources.