Commercial Property Loan Calculator
Estimate your monthly payment, DSCR, LTV, and view a full amortization schedule. Supports independent loan term vs. amortization period with balloon balance calculation.
Commercial property loan calculator
DSCR, LTV, monthly payment, and amortization schedule.
= $375,000.00
Balloon due at year 10
Used for DSCR calculation only.
How commercial property loans work
Commercial real estate loans differ from residential mortgages in several key ways:
- Loan term vs. amortization: A commercial loan might amortize over 30 years but have a 5\u201310 year term, creating a balloon payment.
- DSCR requirement: Lenders evaluate the property's income (NOI) relative to debt service, typically requiring 1.25x or higher.
- Higher down payments: 20\u201335% is standard (75\u201380% max LTV), compared to 3\u201320% for residential.
- Interest rates: Typically 0.5\u20132% higher than residential, varying by property type and risk.
The monthly payment is calculated using standard amortization: P \u00d7 [r(1+r)\u207f] / [(1+r)\u207f \u2013 1], where the amortization period determines the payment size, but the loan term determines when the remaining balance (balloon) is due.
Who uses this calculator
CRE investors
Evaluate acquisition scenarios with different down payments, rates, and terms before making offers.
Commercial brokers
Run quick payment scenarios to help buyers understand their monthly obligations.
Loan officers
Pre-qualify borrowers by checking DSCR and LTV against lending guidelines.
Property managers
Assess whether a property’s NOI can support refinancing at current rates.
Developers
Model permanent financing after construction, comparing term lengths and amortization periods.
Financial analysts
Build quick pro-forma models for commercial real estate underwriting.
\u26a0 Financial disclaimer
This calculator provides estimates for educational and planning purposes only. It does not account for closing costs, origination fees, prepayment penalties, or variable-rate adjustments. Actual loan terms vary by lender. Consult a commercial mortgage professional before making financing decisions.
Frequently asked questions
What is DSCR and why does it matter?
DSCR (Debt Service Coverage Ratio) measures a property’s ability to cover its debt obligations. It’s calculated as Annual NOI ÷ Annual Debt Service. Most lenders require a minimum DSCR of 1.25x, meaning the property’s income must be at least 125% of the loan payments.
What is the difference between loan term and amortization period?
The amortization period determines the payment schedule (e.g., 30 years), while the loan term is when the remaining balance is due (e.g., 10 years). If the term is shorter than the amortization, a balloon payment of the remaining principal is due at the end of the term.
What is a balloon payment?
A balloon payment is the remaining loan balance due at the end of the loan term when the term is shorter than the amortization period. For example, a 30-year amortization with a 10-year term means the remaining balance after 10 years of payments must be paid in full or refinanced.
What LTV do commercial lenders typically require?
Most commercial lenders cap LTV (Loan-to-Value) at 75–80% for conventional loans, meaning 20–25% down payment. SBA 504 loans may allow up to 90% LTV. Lower LTV generally gets better rates.
How is the monthly payment calculated?
The monthly payment uses the standard amortization formula: P × [r(1+r)^n] / [(1+r)^n – 1], where P is the loan amount, r is the monthly interest rate, and n is the total number of amortization months.
What is NOI (Net Operating Income)?
NOI is the property’s annual income after operating expenses but before debt service and income tax. It includes rent, parking, and other income minus vacancy, property tax, insurance, maintenance, and management fees.
What types of commercial properties can I use this for?
This calculator works for any commercial real estate: office buildings, retail centers, industrial warehouses, multifamily apartments (5+ units), mixed-use properties, hotels, and self-storage facilities.
Are commercial loan rates higher than residential?
Generally yes. Commercial rates are typically 0.5–2% higher than comparable residential rates because commercial loans carry more risk. Rates vary by property type, LTV, DSCR, borrower experience, and market conditions.