Commercial Mortgage Calculator
Commercial financing works differently than residential. Terms are shorter, rates are higher, and amortization schedules often create balloon payments that catch buyers off guard. This calculator lets you model different loan structures so you know exactly what your monthly obligation looks like — and what happens when the loan matures. I use these same numbers when helping clients structure purchase offers and evaluate investment returns.
Loan Details
Enter your commercial loan terms to calculate monthly payments and total cost.
How Do Commercial Mortgages Differ From Residential?
Unlike a 30-year fixed residential mortgage, most commercial loans have a 5 to 10 year term with a 20 to 25 year amortization. That means your payments are calculated as if you had 25 years to pay, but the remaining balance comes due as a balloon payment at the end of the shorter term. Understanding this structure is critical before signing a loan commitment.
What Affects Your Commercial Loan Rate?
- Loan-to-value ratio (LTV) — lower LTV typically means better rates
- Debt service coverage ratio (DSCR) — lenders want NOI at least 1.25x the debt service
- Property type and class — Class A office gets different terms than a value-add strip center
- Borrower experience and credit — seasoned investors with strong financials get preferred terms
- Loan type — SBA 504, conventional, CMBS, and bridge loans all have different rate structures
Why Does the Comparison Table Matter?
The total cost difference between a 15-year and 30-year amortization can be hundreds of thousands of dollars. The comparison table shows you exactly how much you save in interest with a shorter amortization — and how much more your monthly payment will be. It is the tradeoff every commercial borrower needs to weigh.
Commercial Mortgage FAQ
- What is a typical commercial mortgage interest rate?
- As of mid-2026, commercial mortgage rates typically range from 6% to 9% depending on loan type, property class, borrower creditworthiness, and loan-to-value ratio. SBA 504 loans and agency multifamily loans tend to offer the most competitive rates.
- What is the difference between loan term and amortization period?
- The loan term is how long you have the loan before it matures (e.g., 10 years). The amortization period is the schedule used to calculate monthly payments (e.g., 25 years). If the term is shorter than the amortization, you will owe a balloon payment at maturity.
- What is a balloon payment in commercial real estate?
- A balloon payment is the lump sum owed at the end of a commercial loan term when the loan has not been fully amortized. Most borrowers refinance before the balloon date to avoid paying the balance in cash.