Calculate commercial mortgage payments for amortizing, interest-only, and balloon loans. Determine your DSCR, LTV, and total interest for any commercial property type.
A $2,000,000 commercial loan for a multifamily property at 6.5% interest, 25-year amortization, 10-year term (balloon).
Monthly Payment: $13,504
Balloon Balance after 10 years: $1,625,483
If NOI is $200,000/year: DSCR = $200,000 / ($13,504 × 12) = 1.23
With a 1.23 DSCR, this loan would likely qualify at most commercial lenders who typically require 1.20–1.25 minimum.
A $5,000,000 bridge loan for an industrial property at 7.8% with a 3-year interest-only period.
Interest-Only Payment: $32,500/mo
After IO Period (amortizing over 25 years): $37,959/mo
Total Interest During IO Period: $1,170,000
Bridge loans are ideal for value-add properties where the borrower plans to increase NOI and refinance within 2-3 years.
A $8,000,000 construction loan for a hotel at 7.2% with a 30-year amortization and 3-year interest-only draw period.
Interest-Only Payment (during construction): $48,000/mo
Construction loans typically carry 1-3% higher rates than permanent financing due to higher risk during the development phase.
Commercial real estate loans differ significantly from residential mortgages. They typically involve shorter loan terms, balloon payments, and more complex underwriting criteria including the Debt Service Coverage Ratio (DSCR).
| Feature | Permanent | Bridge | Construction |
|---|---|---|---|
| Typical Term | 5-10 years | 1-3 years | 1-3 years |
| Rate Premium | Base (SOFR + 2-3%) | +1-2% over permanent | +2-3% over permanent |
| Amortization | 20-30 years | 25-30 years | Interest-only or 30-year |
| Min DSCR | 1.20-1.25 | 1.30-1.40 | 1.30-1.50 |
| Max LTV | 65-75% | 60-70% | 55-65% |
| Best For | Stabilized properties | Value-add / repositioning | New development |
A commercial real estate loan is a mortgage secured by a commercial property rather than a residential home. These loans are used to purchase, refinance, or develop income-producing properties such as apartment buildings, office complexes, retail centers, warehouses, and hotels. Unlike residential mortgages, commercial loans typically have shorter terms (5-10 years), require larger down payments, and use more complex underwriting criteria.
Commercial loans are amortized over a longer period (often 20-30 years) but the loan term itself is usually much shorter, resulting in a balloon payment at maturity. This means the borrower must either refinance or pay off the remaining balance when the term ends. Understanding the full payment structure, including the balloon balance, is essential for any commercial real estate investor.
DSCR (Debt Service Coverage Ratio) is the most important metric in commercial underwriting. It measures the property's ability to cover its debt payments: DSCR = Net Operating Income ÷ Annual Debt Service. Most lenders require a minimum DSCR of 1.20–1.25 for permanent loans, meaning the property generates 20-25% more income than needed to make the mortgage payments. A DSCR below 1.0 means the property doesn't generate enough income to cover the loan — a red flag for lenders.
For example, a multifamily property with $200,000 in annual NOI and a $162,048 annual debt service has a DSCR of 1.23. This is above the 1.20 threshold, making it likely to qualify for financing. Bridge and construction loans typically require higher DSCRs of 1.30–1.50 due to their higher risk profiles.
Lowest risk category. Typically 65-75% LTV, 25-30 year amortization, most favorable rates. Property values driven by rent rolls and occupancy rates.
Moderate risk. Typically 60-70% LTV, 20-25 year amortization. Underwriting focuses on tenant credit quality, lease terms, and vacancy rates.
Variable risk depending on anchor tenants. 55-70% LTV, 20-25 year amortization. Strong anchors like national chains improve loan terms.
Generally stable. 60-75% LTV, 20-25 year amortization. Warehouses and logistics centers have seen growing demand from e-commerce.
Higher risk, higher returns. 50-65% LTV, 20-25 year amortization. Rates are typically 1-2% higher due to revenue volatility and management intensity.
This calculator is designed for commercial real estate investors, brokers, and analysts who need to quickly evaluate financing options. Here's how to get the most out of it:
Choose between Traditional Amortizing (fully paid off), Interest-Only (lower initial payments), or Balloon Payment (most common for CRE).
Select the property type (multifamily, office, retail, industrial, or hospitality) and loan purpose (permanent, bridge, or construction).
Enter the loan amount, interest rate, amortization period, and loan term. For IO loans, specify the interest-only period (1-10 years).
Enter your property's NOI and estimated value to see if your DSCR and LTV ratios meet lender requirements. A DSCR above 1.25 is ideal.
⚠️ Important Disclaimer: This Commercial Real Estate Loan Calculator is for informational and educational purposes only. It provides estimates based on standard amortization formulas and does not account for fees, prepayment penalties, closing costs, property taxes, insurance, or other costs that may be part of your actual commercial loan. Results should be verified with a qualified commercial lender or financial advisor before making any investment decisions. This calculator does not provide financial or investment advice.