Commercial Loan Calculator

Commercial loans usually work differently than a 30-year residential mortgage. The payment is calculated using a long amortization period — often 20 or 25 years — but the loan itself matures much sooner, commonly in five, seven, or ten years. When the term ends before the amortization schedule does, the entire remaining balance comes due as a balloon payment. You either refinance it, sell the property, or pay it off.

That is why the balance at the end of the term matters as much as the monthly payment. A comfortable payment today can still create real pressure at maturity if rates or lending conditions have moved against you.

Loan-to-value is the loan divided by the purchase price. Many commercial lenders cap it well below residential levels and also test the property's income through a debt service coverage ratio. Upfront fees — origination points plus lender charges — are real acquisition costs and belong in your return analysis.

Rates, prepayment penalties, recourse terms, reserve requirements, and fees vary widely by lender and by property type. Treat these figures as a starting point for a lender conversation, not as a quote.