A commercial mortgage does not work like the home loan you are used to, and this free calculator shows you the real payment. Enter the loan amount, interest rate, and amortization, and you will see your monthly and annual debt service.
The big difference in commercial: the loan often amortizes over 20 or 25 years but balloons in 5, 7, or 10, so you make payments as if it is a long loan but you have to refinance or sell before the term ends. Here is the tool, then what to watch for.
The key difference: commercial loans usually amortize over 20 to 25 years but come due (balloon) in 5 to 10 years, so you refinance or sell before the balance is paid off.
What sets your payment: the loan amount, the interest rate, and the amortization period. A longer amortization lowers the payment but you pay more interest over time.
How the Commercial Mortgage Calculator Works
Enter the loan amount, the interest rate, and the amortization period, and the calculator returns your payment. Amortization is the schedule the payment is based on, while the term is how long until the loan comes due. A 25-year amortization with a 7-year term means your payment is calculated as if you had 25 years, but you owe the remaining balance at year 7.
Watch the amortization closely, because it has a big effect on both your payment and your cash flow. A longer amortization means a lower monthly payment and better debt coverage today, at the cost of more total interest and slower equity buildup. Once you know the payment, check it against your income with the DSCR calculator to make sure the deal actually pencils.
Watch: How To Finance Your First Commercial Property
What to Watch in a Commercial Loan
Beyond the payment, three things move the needle: the loan-to-value the lender will give you, the debt service coverage they require, and the balloon date. All three interact. A lender might offer 75% loan to value but then cut the loan so your DSCR stays above their minimum, so you end up with less. And the balloon means interest rate risk lands back on your desk in a few years, which is why I always underwrite a conservative refinance. You can pressure-test the whole thing in my Deal Analyzer.
Commercial Mortgage FAQ
How is a commercial mortgage payment calculated?
It is based on the loan amount, the interest rate, and the amortization period. The calculator applies a standard amortizing payment formula to those three inputs to give you the monthly and annual payment.
What is the difference between amortization and term?
Amortization is the schedule your payment is based on, often 20 to 25 years. The term is how long until the loan comes due, often 5 to 10 years, at which point you refinance or sell and pay off the remaining balance.
What down payment do commercial mortgages require?
It varies, but many commercial loans are sized around 70% to 80% loan to value, meaning a 20% to 30% down payment, and the final loan is often limited by the debt service coverage the lender requires.
What is a balloon payment?
It is the remaining loan balance that comes due at the end of the term. Because commercial loans amortize slowly but come due early, a large balance is still owed, so you plan to refinance or sell before that date.
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Explore CRE CentralCheck your payment against the property's income with the DSCR calculator and the loan to value calculator, or see all the commercial calculators.