A commercial real estate loan calculator helps you estimate monthly payments, total interest costs, and balloon payments for business property financing. Enter your loan amount, interest rate, and term to instantly calculate principal and interest payments, compare amortization schedules, and determine debt service coverage ratios. These calculators simplify complex commercial mortgage decisions and help you plan your property investment budget accurately.
Why You Need a Commercial Loan Calculator
Running the numbers before you commit to a commercial property purchase can save you thousands of dollars. A commercial real estate loan calculator gives you clear visibility into your monthly obligations and total costs over the life of your loan.
Most business owners focus on the interest rate alone. That’s a mistake. Your monthly payment depends on multiple factors working together: loan amount, interest rate, term length, and amortization schedule. Change any one of these variables, and your payment shifts dramatically.
The calculator shows you exactly what you’ll pay each month. It breaks down how much goes toward principal versus interest. You can see your balloon payment amount if your loan includes one. This transparency helps you budget properly and avoid surprises down the road.
How to Use a Commercial Real Estate Loan Calculator
You need four basic inputs to get started.
Loan Amount: This is the total you’re borrowing to purchase or refinance your commercial property. Most commercial mortgages range from $150,000 to $5 million. Your loan amount depends on the purchase price, your down payment, and the lender’s loan-to-value requirements.
Interest Rate Commercial mortgage rates typically fall between 6% and 12% as of 2025. Your actual rate depends on your credit score, business financials, property type, and current market conditions. Rates for commercial loans run about 0.5% to 1% higher than residential mortgages.
Loan Term: This is how long until your balloon payment comes due. Commercial loan terms usually range from 5 to 25 years. Shorter terms mean higher monthly payments but less total interest paid. Longer terms reduce your monthly burden but increase your overall costs.
Amortization Period: This determines how your payments are calculated. Many commercial loans use 25 or 30-year amortization schedules even though the term is only 10 years. Your calculator will show the difference between a fully amortizing loan and one with a balloon payment.
Enter these numbers, and the calculator instantly generates your payment breakdown. You’ll see your monthly principal and interest payment, interest-only payment option, total interest over the term, and final balloon payment amount.
Understanding Your Calculator Results
The output gives you several critical numbers to review.
Monthly Payment: This is what you’ll pay each month to meet your loan obligations. Most payments include both principal and interest. Your monthly payment directly impacts your cash flow and operating budget.
Interest-Only Payment: Some lenders offer interest-only periods at the start of your loan. During this time, you only pay interest charges. Your payment is lower, but you’re not building equity. The calculator shows this option so you can compare costs.
Total Interest Paid: Add up all your interest payments over the full term, and you get this number. It represents the true cost of borrowing. A $2 million loan at 8% for 10 years with 25-year amortization generates roughly $760,000 in interest charges.
Balloon Payment: If your amortization period exceeds your loan term, you’ll owe a lump sum at maturity. For example, a 10-year term with 25-year amortization leaves a substantial balance unpaid. Your balloon payment covers this remaining principal. Many borrowers refinance at this point rather than pay cash.
Amortization Schedule: This table breaks down each payment over the life of your loan. You can see exactly how much of each payment goes to principal versus interest. Early payments are mostly interest. Later payments shift toward principal reduction.
Key Metrics Commercial Lenders Evaluate
Calculators help you understand the numbers lenders care about most.
Debt Service Coverage Ratio (DSCR). This measures your property’s ability to cover loan payments. Divide your net operating income by your annual debt service. Lenders typically require a DSCR of 1.25 or higher. This means your property generates 25% more income than needed to cover the mortgage.
Loan-to-Value Ratio (LTV) This compares your loan amount to the property’s appraised value. Commercial lenders generally approve LTV ratios between 65% and 80%. Lower LTV means you’re putting more money down and taking less risk.
Debt Yield: Divide your net operating income by the total loan amount. This shows lenders what their return would be if they had to foreclose. Most commercial lenders want debt yields above 10%.
Calculate these ratios before you apply. They determine whether you qualify and what terms you’ll receive.
Types of Commercial Real Estate Loans
Different loan structures produce different calculator results.
Conventional Commercial Mortgages: Banks and credit unions offer these loans for owner-occupied properties and investment real estate. Terms run 5 to 25 years with fixed or variable rates. You’ll need strong credit and typically 20% to 30% down.
SBA 7(a) Loans The Small Business Administration backs these loans for owner-occupied properties. You can borrow up to $5 million with terms up to 25 years. Rates are competitive, but the approval process takes longer. You need to occupy at least 51% of the property.
SBA 504 Loans: This program finances property purchases and major improvements through two loans. A Certified Development Company provides 40% of the funding. A traditional lender covers 50%. You contribute 10% as a down payment. Fixed rates and 20-year terms make these attractive for established businesses.
CMBS Loans: Commercial mortgage-backed securities pool multiple loans and sell them to investors. These loans work well for larger properties worth $2 million or more. Expect 5 to 10-year terms with prepayment penalties. Rates are competitive, but underwriting is strict.
Bridge Loans: These short-term loans cover 1 to 3 years. Use them for quick acquisitions or property renovations before permanent financing. Rates run higher at 6% to 10%, but approval happens fast. Most bridge loans are interest-only.
Each loan type calculates differently in your calculator. Bridge loans show lower monthly payments but large balloon amounts. SBA loans may show higher monthly costs but no balloon payment.
Real-World Calculator Example
Let’s work through a practical scenario.
You want to buy a small office building for $1.5 million. You have $375,000 for a down payment (25%). You need to borrow $1,125,000.
Your bank quotes 7.5% interest. The loan term is 10 years with 25-year amortization.
Run these numbers through your calculator:
Monthly principal and interest payment: $8,110 Interest-only monthly payment: $7,031 Total interest paid over 10 years: $398,145 Balloon payment due at year 10: $926,438
Now compare to a 15-year term with the same amortization:
Monthly principal and interest payment: $8,110 Total interest paid over 15 years: $587,668 Balloon payment due at year 15: $721,935
The monthly payment stays the same. But you pay almost $190,000 more in total interest with the longer term. Your balloon payment drops by about $205,000.
Which option makes sense? That depends on your refinancing plans and cash flow needs.
Common Calculator Mistakes to Avoid
Don’t overlook these important factors.
Ignoring Additional Costs: Your calculator shows loan payments only. Commercial properties come with insurance, property taxes, maintenance, and management fees. Budget for these separately. They can add 20% to 40% to your monthly property costs.
Forgetting About Prepayment Penalties: Many commercial loans charge fees if you pay off the balance early. CMBS loans often include yield maintenance or defeasance clauses. These can cost tens of thousands of dollars. Factor this into your refinancing plans.
Overlooking Closing Costs: Expect to pay 3% to 5% of the loan amount in closing costs. This includes appraisal fees, environmental reports, title insurance, and origination charges. A $1 million loan could require $30,000 to $50,000 in upfront costs.
Not Planning for the Balloon Payment: That large lump sum doesn’t disappear. Start planning your refinancing strategy at least 18 months before your balloon payment comes due. Market conditions and your property’s performance will determine your options.
How Commercial Rates Are Determined
Your interest rate connects to several benchmark indexes.
Prime Rate: This is the rate banks charge their most creditworthy customers. As of January 2026, the prime rate sits around 8%. Your commercial rate might be prime plus 1% to 3%, depending on your qualifications.
SOFR (Secured Overnight Financing Rate): This replaced LIBOR as the standard benchmark. SOFR tracks overnight borrowing costs. Many adjustable commercial loans tie their rates to SOFR plus a margin.
Treasury Bonds: The 10-year Treasury yield influences fixed-rate commercial mortgages. When Treasury rates rise, commercial mortgage rates typically follow. The spread between the two usually runs 2% to 3%.
Market conditions shift these indexes constantly. Your calculator should use current rates for accurate projections.
When to Refinance Your Commercial Loan
Your calculator helps identify the right time to refinance.
Rates dropped since you took out your loan. Even a 1% rate reduction can save thousands per month on a large mortgage. Run the numbers with your new rate to see potential savings.
Your property value increased substantially. Higher values mean better loan-to-value ratios. You might qualify for better terms or pull cash out for other investments.
Your balloon payment is approaching. Most borrowers refinance rather than pay the balloon in cash. Start shopping for new terms 12 to 18 months before your maturity date.
Your business credit improved. Better financials and higher credit scores unlock lower rates. If your DSCR improved from 1.25 to 1.5, lenders will compete for your business.
Calculate your new payment and compare it to closing costs. If you’ll save more than you spend on fees, refinancing makes sense.
Final Thoughts
A commercial real estate loan calculator takes the guesswork out of property financing. You can test different scenarios in minutes instead of calling multiple lenders for quotes.
Start by calculating payments for your target property. Play with different down payment amounts to see how they affect your monthly costs. Compare short-term and long-term loan structures. Factor in your debt service coverage ratio to ensure you can afford the payments comfortably.
The calculator gives you the knowledge to negotiate confidently with lenders. You’ll spot unrealistic quotes immediately. You’ll understand which loan structures work best for your situation.
Remember that calculators provide estimates only. Your actual loan terms depend on property appraisals, underwriting results, and final lender approval. But these tools give you a solid starting point for planning your commercial real estate investment.
FAQs
What is a typical down payment for commercial property?
Most lenders require 20% to 30% down for commercial mortgages. Owner-occupied properties may qualify with 10% to 15% down through SBA programs. Investment properties typically need 25% to 35% down. Your exact requirement depends on property type, loan program, and your financial strength.
How do commercial mortgage rates compare to residential rates?
Commercial rates run about 0.5% to 1% higher than residential mortgage rates. As of early 2026, typical commercial rates range from 6% to 10%, while residential rates hover around 6% to 7%. The gap exists because commercial loans carry more risk for lenders.
Can I get a commercial loan with bad credit?
Traditional lenders require FICO scores of 680 or higher for commercial mortgages. Scores below 640 make approval difficult. However, hard money lenders and private investors work with lower credit scores. Expect higher rates (10% to 15%) and shorter terms if your credit needs work.
What’s the difference between a loan term and amortization?
The loan term is when your balloon payment comes due. Amortization is the schedule used to calculate your monthly payments. A loan might have a 10-year term but use 25-year amortization. You make payments as if you’re paying off the loan over 25 years, but the remaining balance comes due in 10 years.
How long does it take to close a commercial loan?
Expect 60 to 90 days from application to closing for most commercial mortgages. SBA loans can take 90 to 120 days—bridge loans and hard money loans close faster, sometimes in 2 to 4 weeks. Complex properties with environmental issues may take longer due to additional due diligence requirements.
