How can a loan have a 5 year maturity and 25 amortization?
Trying to understand this statement “permanent loans on commercial real estate with amortizations ranging from 15-25 years and maturities of 5-7 years”. How can a loan have a 5 year maturity and a 25 year amortization? If it matures at five years, I would’ve thought that is when the loan is due so there would be no further amortization, on the other hand if it is amortized over 25 years, it couldn’t possibly be “mature” at five years.
Clearly I’m not understanding something here.
Thanx for your help,