Commercial Loan Payment and Amortization Calculator
Estimate principal and interest payments for a commercial loan or mortgage from a proposed amount, rate, and amortization period. Review annual debt service and the full schedule.
Request a financing review when you are ready to share the property, requested proceeds, and timeline.
How This Commercial Loan Calculator Works
Use this commercial loan calculator as a commercial mortgage loan calculator, commercial property loan calculator, commercial building loan calculator, or commercial construction loan calculator when you know the proposed loan amount, interest rate, and amortization period. The calculator estimates the monthly payment, annual debt service, total interest, and a month by month commercial loan amortization schedule. Early payments are weighted toward interest and later payments are weighted toward principal.
Monthly Payment = P × r × (1 + r)^n / ((1 + r)^n - 1)
P = loan amount, r = monthly rate, n = number of monthly payments
Worked Example
A borrower takes a $1,000,000 commercial loan at 7.5 percent with a 25 year amortization. The monthly rate is 0.625 percent and the schedule runs 300 months. That produces a monthly payment of roughly $7,390, annual debt service of roughly $88,680, and total interest of roughly $1,217,000 over the full amortization.
Monthly Payment ≈ $7,390
Annual Debt Service ≈ $88,680
Lenders care most about the annual debt service figure because they divide the property's NOI by it to check debt service coverage. Our DSCR calculator runs that test.
Amortization vs Loan Term
Commercial loans usually separate the amortization period from the loan term. A common structure amortizes payments over 25 or 30 years but matures in 5 to 10 years, leaving a balloon balance due at maturity that the borrower refinances or pays off from a sale. A longer amortization lowers the monthly payment without changing the rate, which is why sponsors often negotiate for 30 year schedules on stabilized assets.
20, 25, and 30 Year Commercial Loan Amortization
A 20 year amortization pays principal down faster but creates the highest monthly payment. A 25 year schedule balances payment relief with principal reduction. A 30 year amortization produces the lowest payment and annual debt service, which can improve calculated DSCR, but it also leaves more principal outstanding at any earlier maturity date.
For the same $1,000,000 loan at 7.5 percent, the estimated monthly principal and interest payment is about $8,056 over 20 years, $7,390 over 25 years, and $6,992 over 30 years. These schedules do not mean the lender will offer a 20, 25, or 30 year loan term. A commercial mortgage can use a 30 year amortization while still maturing in 5, 7, or 10 years.
20 year amortization ≈ $8,056 per month
25 year amortization ≈ $7,390 per month
30 year amortization ≈ $6,992 per month
How a 30 Year Amortization Commercial Loan Works
A 30 year amortization commercial loan calculates payments as though the balance will be repaid over 360 months. If the contractual term is only 10 years, the borrower makes the scheduled monthly payments for 10 years and then owes the remaining balloon balance. The calculator shows the full 360 month payment schedule; review the balance at the proposed maturity month to estimate that balloon.
Use the payment result with the DSCR calculator to see how the selected amortization affects property coverage. The lender still decides which amortization, term, rate, and balloon structure it will offer.
Interest Only Periods
Many commercial loans, and most bridge loans, include an interest only period at the start of the term. During that window the payment covers interest alone, so it is lower than the amortizing payment and no principal is retired. The calculator above models an optional interest only period so you can see both payment levels side by side.
Frequently Asked Questions
How do you calculate a commercial loan payment?
Apply the standard amortization formula to the loan amount, interest rate, and amortization period. A $1,000,000 loan at 7.5 percent amortized over 25 years carries a monthly payment of roughly $7,390. The calculator above does the math and also shows annual debt service and total interest.
Can I use this as a commercial real estate loan calculator?
Yes. Use it to estimate principal and interest payments for a commercial real estate loan when you know the loan amount, rate, amortization period, and any interest only period. It provides a payment estimate and amortization schedule, not a loan approval or property valuation.
Does this calculator show a commercial amortization schedule?
Yes. Select Show Amortization Schedule after entering your loan details to see each month's payment, principal, interest, and remaining balance. This commercial loan amortization calculator supports amortization periods from 1 to 40 years.
Can I use this as a commercial mortgage calculator?
Yes. This commercial mortgage calculator and commercial mortgage payment calculator estimate principal and interest payments for a proposed commercial mortgage. It does not include property taxes, insurance, fees, reserves, or other costs outside the loan payment.
Can I use this for a commercial construction loan?
Use this commercial construction loan calculator to estimate a payment once you know the proposed loan amount, rate, and repayment structure. It can model an interest only period, but it does not calculate construction draws, interest reserves, lender fees, or changing loan balances during construction.
Does this calculator provide current commercial loan rates?
No. Enter a rate you have been quoted or test a range of possible rates. Actual commercial loan rates depend on the property type, leverage, term, borrower strength, market, and lender.
What amortization period do commercial loans use?
Most commercial real estate loans amortize over 20 to 30 years, with 25 years being a common midpoint. The amortization period is often longer than the loan term itself, which creates a balloon balance due at maturity.
What is a balloon payment on a commercial loan?
A balloon payment is the remaining principal balance due when the loan matures before the amortization schedule finishes. A loan amortized over 25 years with a 10 year term still carries a large balance at year 10, and the borrower typically refinances or sells to retire it.
How does an interest only period change my payment?
During an interest only period the payment covers interest alone, so it is lower than the fully amortizing payment. A $1,000,000 loan at 7.5 percent carries an interest only payment of $6,250 per month versus roughly $7,390 amortizing. No principal is paid down during the interest only window.
What interest rate should I use in the calculator?
Rates vary by lender, property type, leverage, and borrower strength, so run a range around current market levels rather than a single number. Bank and conventional CRE loans generally price lower than bridge or private money, and the spread between programs can be several percentage points.
Does this calculator include taxes, insurance, or fees?
No. It models principal and interest only. Commercial loans also involve closing costs, origination fees, and in some cases reserves or escrows, so your total cost of borrowing will be higher than the payment alone.