Commercial Mortgage Calculator
Commercial loans amortize over a long schedule but balloon in a shorter term. See the monthly payment and the lump sum due at the balloon date.
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How the commercial mortgage calculator works
Commercial real-estate loans usually amortize over a long schedule, often twenty to twenty-five years, but mature in a much shorter term, commonly five to ten. The calculator prices the monthly payment as though the loan ran the full amortization, then stops at the maturity date to reveal the balloon balance still owed.
That balloon is the figure that defines a commercial loan: a large lump sum due when the term ends, typically refinanced or repaid from a sale. The tool also totals the interest paid up to that point, so you see the real cost before the balloon arrives.
Add the property value and its net operating income to run the two tests lenders apply first: loan-to-value, and debt-service coverage — how many times the income covers the loan payments. The calculator also shows the largest loan the income supports at the common 1.25× coverage minimum.
Worked example: with loan amount of $900,000, interest rate of 7.50% and amortization (years) of 25, the commercial mortgage calculator shows monthly payment of $6,650.92.
- Monthly payment
- $6,650.92
- Balloon due
- $717,458
- Principal paid by then
- $182,542
- Interest to balloon
- $615,568
| Loan amount | Monthly payment |
|---|---|
| $500,000 | $3,694.96 |
| $1,000,000 | $7,389.91 |
| $2,000,000 | $14,779.82 |
| $5,000,000 | $36,949.56 |
The formula
The payment uses the standard amortization formula, Payment = P × r ÷ (1 − (1 + r)^−n), over the long amortization period. The balloon balance at maturity equals P(1 + r)^n − Payment × ((1 + r)^n − 1) ÷ r, where n is the number of payments made before the term ends.
How every calculator here computes, what it assumes and how the defaults stay current: our methodology.
- The rate is fixed through maturity; many commercial loans actually carry adjustable or step-up rates that change the balloon.
- Underwriting is reduced to two tests — LTV and DSCR on the income you enter; lenders also weigh credit, reserves, property type and the borrower's experience.
- The balloon is assumed repaid by refinancing or sale at maturity, an outcome dependent on future rates and property value.
- Origination fees, prepayment penalties, and reserve requirements common to commercial deals are not included here.
- Property taxes, insurance, and operating expenses are excluded, so the payment reflects principal and interest only.
Balloon owed on a $1,000,000 commercial loan
Commercial loans usually amortize over 20–30 years but come due in 5–10. At an example 7.5% rate, this is the payment and the lump sum left at each common balloon date.
| Amortization | Monthly payment | Balloon at year 5 | Year 7 | Year 10 |
|---|---|---|---|---|
| 20 years | $8,055.93 | $869,021 | $801,290 | $678,670 |
| 25 years | $7,389.91 | $917,325 | $874,573 | $797,175 |
| 30 years | $6,992.15 | $946,174 | $918,340 | $867,950 |
A longer amortization lowers the payment but leaves a bigger balloon — plan the refinance or sale well before it comes due.
How debt-service coverage (DSCR) caps the loan
Lenders divide a property's yearly net operating income (NOI) by the yearly loan payments. Most require at least 1.20–1.25×. The most you can borrow at 7.5% on a 25-year amortization:
| Yearly NOI | At 1.20× DSCR | At 1.25× | At 1.35× |
|---|---|---|---|
| $60,000 | $563,832 | $541,278 | $501,184 |
| $100,000 | $939,720 | $902,131 | $835,306 |
| $150,000 | $1,409,579 | $1,353,196 | $1,252,959 |
| $250,000 | $2,349,299 | $2,255,327 | $2,088,266 |
The loan you actually get is the lower of this DSCR limit and the lender's loan-to-value cap (often 65–80% of the appraised value).
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender or a licensed advisor.
Questions about the commercial mortgage calculator
Why does a commercial loan amortize over longer than its actual term?
The long amortization keeps the monthly payment affordable, while the shorter term lets the lender reprice or exit before committing decades to one borrower. You get a manageable payment; they limit long-term rate risk.
The trade-off lands on you as the balloon, a large balance due at maturity that must be refinanced or paid from a sale.
What is DSCR and why do commercial lenders care about it?
Debt-service-coverage ratio divides a property's net operating income by its annual loan payments. A ratio above one means the building earns enough to cover its own debt, with surplus as the cushion lenders want. Most require roughly 1.2 or higher.
This calculator sizes the payment but does not test DSCR, so verify the property's income supports it.
What happens if I cannot refinance the balloon at maturity?
The full balloon comes due, and without a refinance or sale you face default. Lenders sometimes grant an extension or renewal, but on their terms and often at a higher rate.
Falling property values or tighter credit can leave a balloon unrefinanceable, which is why borrowers plan the exit early rather than assuming refinancing will simply be available.
Is my information saved or shared?
No. Every calculation runs entirely in your browser. We never store, transmit or sell the numbers you enter.
How is a commercial mortgage different from a residential one?
Commercial mortgages fund income property and typically carry shorter terms, higher rates, larger down payments (often 20–35%) and frequently a balloon payment, with approval based on the property’s income rather than just personal credit.
Sources
- Freddie Mac — Primary Mortgage Market Survey (weekly average rates)
- CFPB — Loan Estimate explainer
- CFPB — Fixed-rate vs adjustable-rate mortgages
How the figures on this site are calculated and tested: methodology · editorial policy.
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