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Business finance / Commercial Mortgage Calculator

Commercial Mortgage Calculator

Monthly payments on a commercial property loan, the balloon left when the term ends, and whether the rent covers the debt.
$

Enter a number of at least 0

%

Enter a number from 0 to 100%

Set by your lender. SBA 504 loans need at least 10%, or 15% to 20% for new businesses and special-purpose buildings.

%

Enter a number from 0 to 100%

Use the rate on your quote. The default 7% equals the bank prime rate on 19 Oct 2026.

Whole number, 1–30

The schedule the payment is based on.

Whole number, 1–30

When the remaining balance is due. If it is shorter than the amortization, you owe a balloon payment.

$

Enter a number of at least 0

Rent minus operating costs, before the loan payment. Used for DSCR. Enter 0 to skip.

Monthly payment
$5,300.84
$589,750.47balloon at maturity
75.0%loan-to-value
1.41DSCR
Property price$1,000,000.00
Down payment−$250,000.00
Loan amount$750,000.00
Payments over 10 years · 120 × $5,300.84$636,101.28
Interest paid over the term$475,851.75
Principal paid over the term$160,249.53
Balloon payment due at maturity$589,750.47
Yearly debt service$63,610.13

After 10 years you still owe $589,750.47, which you refinance or pay off. Your DSCR is 1.41; check it against your lender's minimum.

See breakdown

How the commercial mortgage calculation works

  1. The loan is the price minus your down payment

    A $1,000,000 property with 25% down needs a $750,000 loan, a 75% loan-to-value.

  2. The payment uses the amortization period

    Payment = loan × r ÷ (1 − (1 + r)^−n), with r the monthly rate and n the amortization months. $750,000 at 7% over 25 years is $5,300.84 a month.

  3. The balance is due when the term ends

    Many commercial loans are due before the amortization ends. With a 10-year term on a 25-year amortization, $589,750.47 is still owed after 120 payments, as a balloon.

  4. Check the rent covers the debt

    DSCR = net operating income ÷ yearly debt payments. $90,000 ÷ $63,610.13 = 1.41. Above 1.00 the NOI covers the payments; each lender sets its own minimum.

Worked example. A $1,000,000 commercial building bought with 25% down needs a $750,000 loan. At 7% amortized over 25 years the payment is $5,300.84 a month. Over a 10-year term you pay $475,851.75 in interest, repay $160,249.53 of principal, and owe a $589,750.47 balloon at maturity. With $90,000 of NOI the DSCR is 1.41.

Commercial Mortgage FAQ

How are commercial mortgage payments calculated?

Like a home loan, using the amortization period rather than the shorter loan term. The monthly rate is the yearly rate ÷ 12, and the payment is loan × r ÷ (1 − (1 + r)^−months). A $750,000 loan at 7% over 25 years is $5,300.84 a month.

How do you calculate a commercial real estate loan payment?

Subtract the down payment from the price to get the loan, then apply the payment formula over the amortization period. For a $1,000,000 property with 25% down, the $750,000 loan at 7% over 25 years costs $63,610.13 a year. If the term is 10 years, add the $589,750.47 balloon you refinance or pay off at maturity.

What is the difference between amortization and term?

Amortization is the schedule the payment is based on. The term is when the loan must be repaid or refinanced. When the term is shorter, the unpaid balance is due as a balloon. In the example, a 10-year term on a 25-year amortization leaves $589,750.47.

How much down payment does a commercial mortgage need?

For a conventional loan, the lender sets it based on the property and your finances. SBA 504 loans have fixed minimums: at least 10% of the project cost, 15% if the business has operated two years or less or the building is special-purpose, and 20% if both apply.

What DSCR do lenders require?

Each lender sets its own minimum, and it can vary by property type. A DSCR of 1.00 means NOI only just covers the payments, and lenders want a cushion above that. A DSCR of 1.25 means NOI is 25% more than the yearly payments. Use the DSCR calculator to work back to the largest loan a given NOI supports.

What are commercial mortgage rates based on?

Lenders price each loan from a benchmark plus a margin for the property and borrower. The bank prime rate was 7.00% in the Federal Reserve H.15 release of 19 Oct 2026. The CDC part of an SBA 504 loan is pegged to the 10-year U.S. Treasury rate. Enter the rate on your quote; this page does not list market rates.

Are commercial mortgage rates fixed?

Some are fixed for the term, others are variable or reset after a few years. Enter the rate on your quote; for a variable loan, try a higher rate to test the payment.

Sources: SBA: 504 loans (maturity terms and rate basis) · eCFR: 13 CFR 120.910, 504 borrower contributions · Federal Reserve H.15: bank prime rate, 19 Oct 2026

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