Apartment Building Loan Rates Rise as 10yr Treasury jumps 31bp in Ten Days

After two weeks of holding at 5.068% the apartment loan rate we track rose to 5.274%, pushed higher by the 10yr Treasury moving up 31 basis points in the last week and a half. The spread between the two remained below the 2013 average of 2.628, coming in at 2.394:

Aparment Building Loan Rates Rise August 20 2013

This means that the monthly payment on a $1,000,000 apartment building investment loan with 30 year amortization would rise from $5,410 to $5,537 or more than $1,500 per year. The higher interest rate would also lower the Debt Coverage Ratio (AKA DCR/DSCR/DSR) and raise the Break Even Ratio (BER).

For details on the 10 year fixed apartment loan rate we track see here.

For a description of how the 10 year Treasury rate is calculated see here.

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