Free commercial loan calculator
Enter the loan amount, interest rate, and term — this commercial loan calculator shows monthly payment, total interest, and DSCR context for a commercial real-estate or business loan, updated live, as you type.
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Fixed-rate amortized loan. Does not include fees, insurance, or taxes. Rates and terms vary by lender.
Results are estimates. Consult a professional.
How the commercial loan calculator works
Commercial real estate loans share the same amortization formula as residential mortgages, but with a critical structural difference: most are not fully amortizing. A typical commercial loan has a 20- or 25-year amortization schedule — setting the payment amount — but a 5-, 7-, or 10-year balloon term, at which point the entire remaining balance is due. Lenders also evaluate every commercial loan against three underwriting thresholds: DSCR, LTV, and Debt Yield.
The balloon payment is perhaps the most important feature of commercial loans that residential borrowers find unfamiliar. Payments are calculated as if the loan runs 25 years, but after 7 years (for example), the borrower must refinance or pay the remaining balance — which can be 85–90% of the original loan amount, even after 7 years of payments.
FDIC — Commercial Real Estate Lending guidance and examination procedures.Worked example: $250,000 commercial loan at 7% / 10 years
A small business owner purchases a mixed-use commercial property with a $250,000 mortgage at 7% APR, fully amortizing over 10 years (120 months). The property generates $36,000/year in NOI. What is the monthly payment, total cost, and DSCR?
Monthly payments by loan size, rate, and amortization term
Figures assume fixed-rate, fully amortizing loans with no balloon. Most commercial loans in practice are 25-year amortizations with 5- or 10-year balloon terms — use the 25-year row to estimate the monthly payment, and know the remaining balance will be due at the balloon date.
| APR | Amort. Term | $250k | $500k | $1M | $2M |
|---|---|---|---|---|---|
| 6.5% | 10 years | $2,840 | $5,680 | $11,360 | $22,720 |
| 6.5% | 20 years | $1,864 | $3,728 | $7,456 | $14,912 |
| 6.5% | 25 years | $1,688 | $3,376 | $6,751 | $13,502 |
| 7.0% | 10 years | $2,903 | $5,806 | $11,611 | $23,222 |
| 7.0% | 20 years | $1,938 | $3,876 | $7,752 | $15,503 |
| 7.0% | 25 years | $1,767 | $3,534 | $7,068 | $14,137 |
| 8.0% | 10 years | $3,034 | $6,067 | $12,133 | $24,266 |
| 8.0% | 20 years | $2,091 | $4,183 | $8,366 | $16,731 |
| 8.0% | 25 years | $1,930 | $3,860 | $7,720 | $15,440 |
Source: Calculator-s.cloud amortization model; FDIC commercial lending benchmarks. Balloon balances not shown.
Tips for commercial real estate financing
Commercial lending underwriting is fundamentally asset- and income-based, not just borrower-credit-based. Lenders care most about whether the property's cash flow can service the debt — the borrower's personal creditworthiness is secondary. Understanding the three key ratios before approaching a lender puts you in a stronger negotiating position.
- Calculate DSCR before you shop — Lenders require DSCR ≥ 1.25 (most banks) to 1.35 (conservative lenders). If your NOI doesn't cover 125% of projected debt service, reduce the loan amount, increase the down payment, or negotiate higher rents before applying.
- Understand the balloon date risk — A 25-year amortization with a 7-year balloon means you must refinance in year 7, regardless of rates. If rates have risen significantly by then, your new monthly payment could be much higher. Some borrowers buy interest rate caps to hedge this risk.
- Target LTV of 75% or below — Most commercial lenders cap LTV at 75–80% (20–25% down payment). Lower LTV qualifies you for better rates and broader lender choice. SBA 504 loans can finance up to 90% LTV but require occupancy.
- Track debt yield alongside DSCR — Debt Yield = NOI ÷ Loan Amount. Lenders increasingly use this metric because it's independent of interest rate and amortization term. A debt yield of 8–9% is typically the minimum threshold for institutional lenders.
- Budget for reserves — Most commercial lenders require 3–6 months of debt service held in reserve at closing, plus a capital expenditure reserve (typically $0.15–$0.25/sq ft/yr for older properties). These are out-of-pocket costs on top of the down payment.
Accuracy and limitations
This calculator models fixed-rate, fully amortizing term loans. Most commercial real estate loans are not fully amortizing — they have shorter balloon terms (5, 7, or 10 years) within a longer amortization schedule. This calculator does not model balloon payments, floating-rate loans (including SOFR-based commercial rates), interest-only periods, construction-to-permanent loan structures, SBA 504 first- and second-mortgage structures, or lender-specific fees (origination, appraisal, environmental assessment, title insurance).
Not tax or financial advice. Commercial real estate transactions involve significant legal, tax, and financial complexity. Depreciation, cost segregation, 1031 exchanges, and passive activity loss rules can materially affect the after-tax economics of a commercial property. Always consult a licensed commercial real estate attorney, CPA, and qualified lender before committing to any commercial property acquisition or financing.
Commercial loan terms defined
About this commercial loan calculator
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