Commercial real estate loans work differently than residential mortgages, and the differences matter. Loan structures vary widely, balloon payments are common, and lenders evaluate deals based on the property's income as much as the borrower's financials.
Our commercial mortgage calculator estimates your monthly payment, balloon payment amount, and total interest cost for fully amortizing, balloon, and interest-only loan structures.
Commercial Loan Calculator
Calculate monthly payments, balloon amounts, and total interest for commercial real estate loans.
Important commercial mortgage terms to know
Loan amount: The amount borrowed to finance the commercial property. Unlike residential loans, commercial loan amounts are typically evaluated in relation to the property's income and value — not just the borrower's personal finances.
Amortization period: The length of time used to calculate your monthly payment. Common amortization periods for commercial loans are 15, 20, 25, and 30 years. A longer amortization period means lower monthly payments but more total interest paid.
Balloon term: The actual due date of the loan — often much shorter than the amortization period. A 10-year balloon on a 25-year amortization schedule, for example, means your monthly payments are calculated as if you have 25 years to repay, but the remaining balance comes due in full at year 10. That balloon payment must be repaid through a sale, refinance, or other financing.
Balloon payment: The lump-sum balance due at the end of the balloon term. On a $1,000,000 loan at 7.25% with a 25-year amortization and 10-year balloon, the balloon payment would be roughly $792,000. Borrowers need a clear plan for this — either refinancing or selling the property before the balloon comes due.
Fully amortizing: A loan structure with no balloon payments is calculated to pay off the full balance by the end of the loan term, similar to a residential mortgage. Less common in commercial lending but available and worth modeling if payment certainty is a priority.
Interest-only: A structure in which monthly payments cover only interest for the full loan term or an initial period, with no principal reduction. This keeps monthly costs low but means the full loan amount is still owed at maturity.
DSCR (debt service coverage ratio): The ratio of the property's net operating income (NOI) to its annual debt service. Most commercial lenders require a minimum DSCR of 1.25 — meaning the property generates at least 25% more income than it needs to cover the mortgage payment. Enter your annual NOI in the calculator to see your DSCR alongside your payment estimate. Or, you can use our DSCR calculator to find your DSCR.
PITI (principal, interest, taxes, and insurance): Your total monthly cost including property taxes and insurance on top of the loan payment. Lenders look at PITI — not just P&I — when evaluating debt service coverage.
Balloon loans: plan before maturity
The most important thing to understand about commercial balloon loans is that the balloon payment doesn't take care of itself. If you can't refinance or sell when the balloon comes due, because rates have risen, the property has lost value, or your financial profile has changed, you could face serious pressure. Build your exit strategy into the deal from day one.
How to get help with a commercial mortgage
Commercial lending is more complex and less standardized than residential financing. Lender requirements, loan structures, and rates vary significantly by property type, location, and borrower profile. An experienced mortgage professional can help you find the right structure and lender for your deal.
Best Interest Financial has the experience to help. With decades of experience and over $1 billion in closed loans, their team knows how to identify commercial financing solutions that work for your property and goals. Talk with a Best Interest loan officer about commercial mortgage options.