Introduction
A commercial mortgage is a loan used to buy property for business purposes, such as an office building, retail store, or apartment complex. These loans work differently from home loans. They often have shorter terms, larger down payments, and a big lump-sum payment called a balloon payment due at the end.
This commercial mortgage calculator helps you figure out your monthly payments, total interest costs, and balloon payment amount before you commit to a loan. Enter your purchase price, down payment, interest rate, and loan terms to get a full breakdown in seconds. The calculator also shows your debt service coverage ratio (DSCR), equity growth over time, cash-on-cash return, and a complete amortization schedule you can download or print.
Whether you are buying your first commercial property or refinancing an existing one, use this tool to compare loan options, understand your true costs, and make sure the deal makes financial sense.
How to Use Our Commercial Mortgage Calculator
Enter your loan details in the fields below to get your monthly payment, total interest, balloon balance, equity projections, and a full amortization schedule.
Property Purchase Price — Type the full price of the commercial property you plan to buy.
Down Payment — Enter the cash you will put toward the purchase. Use the $ or % toggle to switch between a dollar amount and a percent of the purchase price. If you need help deciding how much to put down, try our down payment calculator.
Loan Amount — This is the amount you need to borrow. It updates when you change the price or down payment, but you can also type a number here directly.
LTV (Loan-to-Value) — This shows your loan as a percent of the property price. Change it to adjust the loan amount and down payment at the same time. You can also use our dedicated LTV calculator to explore different scenarios.
Annual Property Appreciation Rate — Enter the yearly rate you expect the property value to grow. This is used to estimate your equity at the balloon date.
Estimated Closing Costs — Enter any upfront fees like legal, appraisal, or title costs. Toggle between a flat dollar amount or a percent of the loan amount. For a deeper breakdown of what to expect, see our closing cost calculator.
Annual Interest Rate — Type the yearly interest rate on your loan. This is the rate your lender quotes you.
Amortization Term — Enter the full length of time used to calculate your payments. You can set this in years or months. A longer term means lower monthly payments.
Loan Term (Balloon Due) — Enter when the remaining balance comes due. If this is shorter than the amortization term, you will owe a balloon payment at the end. Set it equal to the amortization term for a fully amortizing loan with no balloon. Use our balloon payment calculator for a closer look at that lump-sum amount.
Loan Start Date — Pick the month, day, and year your loan begins. This sets the dates shown in the amortization schedule.
Interest-Only Period — Choose how many years you will pay only interest before principal payments begin. Select "None" if your loan has no interest-only phase. Our interest only calculator can help you compare interest-only payments side by side.
Loan Origination Fee — Enter the fee your lender charges to set up the loan. Toggle between a dollar amount or a percent of the loan amount.
Roll Origination Fee into Loan — Choose "Yes" to add the origination fee to your loan balance instead of paying it upfront. Choose "No" to pay it out of pocket at closing.
First Year NOI — Enter your net operating income, which is rental income minus operating expenses. This is optional. If you fill it in, the calculator will show your DSCR and cash-on-cash return. You can also estimate your property's income potential with our cap rate calculator or rental yield calculator.
Prepayment Penalty (Optional) — Click to expand this section. Pick a penalty type: step-down, flat percent, or fixed dollar amount. Then enter your planned payoff year to see what the penalty would cost. For step-down, you can edit the penalty percent for each year.
Press the Calculate button to see your results. Use the Amortization Schedule tab to view a yearly or monthly breakdown of every payment, or switch to a chart view. You can also download the schedule as a CSV file or print it.
What Is a Commercial Mortgage?
A commercial mortgage is a loan used to buy property that is not a personal home. This includes office buildings, apartment complexes, retail stores, warehouses, and other business properties. The borrower puts down a portion of the price in cash, called a down payment, and a lender covers the rest. The borrower then pays back the loan over time with interest. If you are looking for a residential loan instead, try our mortgage calculator.
How Commercial Mortgages Work
Commercial loans work differently from home loans. Most have two timelines that matter. The amortization term is the full period used to calculate your monthly payment, often 25 or 30 years. The loan term is the actual length of the loan, which is usually much shorter — often 5 to 10 years. When the loan term ends, the remaining balance is due all at once. This lump sum is called a balloon payment. At that point, most borrowers refinance into a new loan.
Key Terms to Know
Loan-to-Value (LTV) is the loan amount divided by the property price, shown as a percentage. Lenders use LTV to measure risk. A lower LTV means less risk for the lender. Most commercial lenders want an LTV of 75% or less.
Interest-only periods let you pay just the interest for the first few years. Your monthly payment is lower during this time, but the loan balance does not go down. After the interest-only phase ends, payments jump up because you must start paying off the principal in a shorter window.
Debt Service Coverage Ratio (DSCR) compares the income a property earns to the loan payments it must cover. Lenders typically want a DSCR of 1.25 or higher. That means the property brings in at least 25% more income than the annual loan cost. A DSCR below 1.0 means the property does not earn enough to cover its debt, which is a red flag for lenders. Run the numbers in detail with our DSCR calculator.
Costs Beyond the Loan Payment
When you take out a commercial mortgage, you pay more than just the loan itself. An origination fee is what the lender charges to set up the loan, usually around 1% of the loan amount. Closing costs cover things like appraisals, title searches, and legal fees. Some borrowers choose to roll the origination fee into the loan so they do not have to pay it upfront, but this increases the total amount financed and the interest paid over time. For small business owners, an SBA loan calculator can help you explore government-backed financing options that may offer lower fees. You should also factor in ongoing expenses such as property taxes when evaluating the full cost of ownership.
Prepayment Penalties
Many commercial loans charge a fee if you pay off the loan early or refinance before the term ends. This is called a prepayment penalty. A common structure is a step-down penalty, where the fee starts high and drops each year. For example, a 5-4-3-2-1 schedule means you pay 5% of the balance if you pay off in year one, 4% in year two, and so on. Knowing this cost ahead of time helps you plan the best time to sell or refinance. If you are comparing the total cost of paying off a loan early, our mortgage payoff calculator can help you weigh the savings against the penalty.