What is effective borrowing cost?
EBC, the IRR on the borrower’s cash flows: net proceeds after points AND third-party closing costs, versus the full payment schedule. Sits at or above lender’s yield, and rises further if the loan is repaid early (upfront costs spread over fewer years).
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.