Commercial Real Estate Loan Payment Calculator
Calculate monthly principal and interest payments, total interest costs, and balloon payoff amounts for commercial property loans.
Commercial Real Estate Loan Payment Calculator
Calculate monthly payments, interest costs, balloon payoff, and amortization
Loan Summary
Annual Debt Service: $162,050 / yr
Must be refinanced or paid off at loan maturity
First Year Amortization Schedule (First 12 Months)
| Month | Start Balance | Payment | Principal | Interest | End Balance |
|---|---|---|---|---|---|
| 1 | $2,000,000 | $13,504 | $2,671 | $10,833 | $1,997,329 |
| 2 | $1,997,329 | $13,504 | $2,685 | $10,819 | $1,994,644 |
| 3 | $1,994,644 | $13,504 | $2,700 | $10,804 | $1,991,944 |
| 4 | $1,991,944 | $13,504 | $2,714 | $10,790 | $1,989,230 |
| 5 | $1,989,230 | $13,504 | $2,729 | $10,775 | $1,986,500 |
| 6 | $1,986,500 | $13,504 | $2,744 | $10,760 | $1,983,757 |
| 7 | $1,983,757 | $13,504 | $2,759 | $10,745 | $1,980,998 |
| 8 | $1,980,998 | $13,504 | $2,774 | $10,730 | $1,978,224 |
| 9 | $1,978,224 | $13,504 | $2,789 | $10,715 | $1,975,435 |
| 10 | $1,975,435 | $13,504 | $2,804 | $10,700 | $1,972,631 |
| 11 | $1,972,631 | $13,504 | $2,819 | $10,685 | $1,969,812 |
| 12 | $1,969,812 | $13,504 | $2,834 | $10,670 | $1,966,978 |
What Is Commercial Loan Amortization and Why It Matters
Commercial real estate mortgages differ significantly from residential loans. While residential loans often feature 30-year fixed terms, commercial loans typically feature shorter loan maturity terms (such as 5, 7, or 10 years) paired with a longer amortization schedule (such as 25 or 30 years). At maturity, the remaining principal balance must be paid off or refinanced via a "balloon payment." Calculating your monthly debt service and balloon payoff is essential for projecting cash flow and refinancing risk.
The Formula
M = P × [ r(1 + r)^n ] / [ (1 + r)^n − 1 ]A Real Example
Frequently Asked Questions
What is a balloon payment in commercial real estate?
A balloon payment is a lump-sum principal balance due at the end of a loan term when the loan's maturity period (e.g. 10 years) is shorter than its amortization schedule (e.g. 25 years). Investors typically refinance or sell the property before the balloon date.
What amortization period is standard for commercial mortgages?
Most commercial real estate loans use a 25-year amortization schedule. Primary, institutional assets may qualify for 30-year amortization, while older or special-purpose properties may be restricted to 20 years.
How does interest rate impact commercial debt service?
Because commercial loan amounts are large, even a 0.5% interest rate change significantly shifts annual debt service, directly impacting your DSCR and Cash-on-Cash returns.
Are commercial loan interest rates fixed or variable?
Commercial loans can feature fixed rates for 5 to 10 years, or variable/floating rates tied to SOFR or Prime. Hybrid loans often fix the rate for the initial 5 or 7 years before resetting.