The gradual repayment of loan principal over time through scheduled payments.
Related terms
- Balloon payment
A large lump-sum principal repayment due at the maturity of a loan that was only partially amortised over its term, forcing a refinancing or sale.
- Basis point (bps)
One hundredth of a percentage point (0.01%); the standard unit for quoting changes in interest rates, yields, and fees — 100 bps equals 1%.
- Bridge loan
Short-term financing (typically under three years) used to acquire, stabilise, or reposition an asset until permanent financing or a sale is arranged; priced h…
- Capital adequacy
A regulatory measure of whether a bank or lender holds enough capital against its risk-weighted assets to absorb losses; tighter rules directly affect real est…
- Capital stack
The layered structure of financing in a deal, from senior debt at the bottom to equity at the top.
- Cash sweep
A covenant directing surplus cash flow to accelerate loan repayment rather than distribute it to equity, common in bridge and construction facilities to de-ris…
- Construction loan
A loan drawn down in stages against verified progress to fund development, usually interest-only during the build and repaid or refinanced on completion.
- Cost of capital
The blended required return on the debt and equity funding an investment.