Monday, September 9, 2013

Trepp August Payoff Report: Percentage of Loans Paying at Maturity Stays above 70% Despite Modest Dip




NEW YORK, NY -- According to the Trepp August Payoff Report, the percentage of loans paying off on their balloon date registered 72.1% last month. This is down two points from 74.1% in July, which was the highest reading in almost five years. August's rate is the second highest level during that time period.

At 72.1%, the August payoff percentage is well above the 12-month moving average of 63.3%. (This number sums the averages of each month and divides by 12, there was no balance weighting across the months.) 

By loan count (as opposed to balance), 72.2% of loans paid off. The 12-month rolling average by loan count is now 65.1%.

The recent trend of higher payoff rates over the last few months, especially relative to 2012, is not surprising. In 2012, many of the maturing loans were five-year balloons from the 2007 vintage. The majority of loans reaching their maturity now are 10-year balloons that were originated in 2003.

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