I know I have read it on here, but could not find it when searching. When comparing to the treasury rate on a note with a 30 year am and 5 year balloon, which rate do I use? The 20 since it is as far out as it goes, or the 5 because of the balloon.

Thanks!

You use the term of the loan. In this case you would use the 5 years.

Always the term, never the ammortization. M Lee is correct.

Thanks!

I am new to this site and have been searching some subjects of interest (or should I say self doubt) . Forgive me for beating a dead horse as I see the answers to this post were straight to the point, but I may have been looking at this issue incorrectly.

When determining the rate for a section 32 cap I would use the rate comparable to my term not the my amortization? i.e. use 15yr on a 30/15 balloon?

Correct. For a 15 year balloon amortized over 30 years, you will use the Treasury's comparable rate for 15 years. Since 15 is halfway between the comparable 10 and 20 year rates you will select the lower of the two rates.

You will always use the loan's term to find the comparable Treasury rate. Ignore the amortization.