Last updated: November 2026
A commercial real estate loan payment calculator turns four numbers (loan amount, interest rate, amortization period and the property's net operating income) into a monthly payment, annual debt service and a debt service coverage ratio (DSCR). The monthly payment uses the standard amortization formula. Commercial loans often amortize over 20 to 30 years but come due sooner, so you also need the balloon balance at maturity. This guide explains each input, the formulas, a worked hypothetical example and how to read the results. Run your own numbers in the calculator below this guide.
The inputs, and what they mean in commercial lending
| Input | What to enter | Common mistake |
|---|---|---|
| Loan amount | The amount borrowed, after your down payment | Entering the purchase price instead of the loan |
| Interest rate | The annual note rate quoted by the lender | Using an advertised "starting at" rate rather than your quote |
| Amortization (years) | The schedule used to calculate the payment | Confusing it with the loan term (when the loan comes due) |
| Annual NOI | Property income minus operating expenses, before debt service | Using gross rent, or forgetting taxes, insurance, management and repairs |
Term vs. amortization. The amortization period sets the payment; the term sets when the remaining balance is due. A loan with a 25-year amortization and a 10-year term has a payment calculated over 25 years, but after 120 payments the unpaid balance (the balloon) must be repaid, usually by refinancing or selling. SBA loans are an exception that can fully amortize over long terms: 7(a) real estate loans can run up to 25 years (SBA 7(a) terms), and 504 loans offer 10-, 20- and 25-year maturities (SBA 504).
The formulas behind the calculator
Monthly payment (principal and interest)
M = L × r(1 + r)^n ÷ [(1 + r)^n − 1]
L is the loan amount, r is the monthly rate (annual rate ÷ 12) and n is the number of monthly payments over the amortization period (years × 12). As a check, a $1,000,000 loan at 6.5% over 25 years gives about $6,752 a month.
Annual debt service
Annual debt service = M × 12
Debt service coverage ratio
DSCR = annual NOI ÷ annual debt service
A DSCR of 1.00 means the property's income exactly covers the loan payments; below 1.00 it does not. Lenders set their own minimums above 1.00 to leave a cushion. Our guide to DSCR covers how lenders calculate NOI.
Balloon balance at the end of the term
B = L(1 + r)^k − M × [(1 + r)^k − 1] ÷ r
k is the number of payments made before the loan comes due (for a 10-year term, 120). The calculator below shows payment, debt service and DSCR; use this formula, or ask the lender for an amortization schedule, to find the balloon.
Interest-only payment
Monthly interest-only payment = L × annual rate ÷ 12
Worked example (hypothetical)
All figures are hypothetical. A $1,500,000 loan at 7.25% with a 10-year term, on a property with $165,000 of annual NOI.
| Amortization | Monthly payment | Annual debt service | DSCR | Balance due after 10 years |
|---|---|---|---|---|
| 20 years | $11,856 | $142,268 | 1.16 | $1,009,841 |
| 25 years | $10,842 | $130,105 | 1.27 | $1,187,703 |
| 30 years | $10,233 | $122,792 | 1.34 | $1,294,655 |
| Interest-only | $9,063 | $108,750 | 1.52 | $1,500,000 |
Reading the table: a longer amortization lowers the payment and raises the DSCR, but leaves a larger balloon. Interest-only looks best on coverage and pays nothing down. Which structure is "affordable" depends on both today's DSCR and whether you can refinance or repay the balloon in ten years.
Rate sensitivity (same loan, 25-year amortization)
For where rates start today (Prime, Treasury yields and SBA caps), see commercial loan rates.
| Rate | Monthly payment | DSCR at $165,000 NOI |
|---|---|---|
| 6.75% | $10,364 | 1.33 |
| 7.25% | $10,842 | 1.27 |
| 7.75% | $11,330 | 1.21 |
A half-point change moves the payment by roughly $480 a month here. If a lender's minimum DSCR were (hypothetically) 1.25, this loan would pass at 7.25% and fail at 7.75%. In that case the lender would typically cut the loan amount, not just raise the payment.
Amortization schedule: principal and interest each month
Each payment splits into interest (on the current balance) and principal (the rest). Early payments are mostly interest. For the hypothetical 25-year loan above:
| Payment | Interest | Principal | Remaining balance |
|---|---|---|---|
| Month 1 | $9,062.50 | $1,779.60 | $1,498,220.40 |
| Month 2 | $9,051.75 | $1,790.35 | $1,496,430.04 |
| Month 3 | $9,040.93 | $1,801.17 | $1,494,628.87 |
| Year 1 total | $108,026 | $22,079 | $1,477,921 |
| Year 5 total | $100,624 | $29,482 | $1,371,765 |
| Year 10 total | $87,789 | $42,317 | $1,187,703 |
To build a full schedule in a spreadsheet: interest = prior balance × monthly rate; principal = payment − interest; new balance = prior balance − principal. Repeat for each month. Ask each lender for its schedule, since some calculate interest on an actual/360 day count, which slightly changes the figures.
What the calculator leaves out
- Taxes, insurance and reserves: many lenders escrow them monthly on top of principal and interest. For owner-occupied property they belong in your budget, even though NOI already accounts for them on income property.
- Fees: origination, legal, appraisal and third-party reports raise your effective cost; SBA loans add guarantee fees.
- Prepayment terms: step-down penalties, yield maintenance or defeasance can make early refinancing expensive.
- Floating rates: if the rate floats (for example, over the prime rate, 7.00% as of November 2, 2026 per the Federal Reserve H.15), rerun the numbers at higher rates.
- Loan-to-value: the lender will also cap the loan as a share of the appraised value. The smaller of the DSCR-based and LTV-based amounts usually wins.
How to compare lender offers with the calculator
- Enter each offer's loan amount, rate and amortization; note payment and DSCR.
- Calculate the balloon at each offer's maturity using the formula above.
- Add fees and estimate total cost over the years you expect to keep the loan.
- Compare prepayment terms, recourse and personal guarantees, covenants and reserve requirements.
- Stress-test: lower NOI by 10% and raise the rate by a point. Does the DSCR still clear the lender's minimum?
If a loan matures before you can repay it, see commercial real estate refinance loans; for short-term transitional financing, see commercial bridging loans. For lender types, see the largest commercial real estate lenders.
Frequently asked questions
How do I calculate a commercial mortgage payment?
Use M = L × r(1 + r)^n ÷ [(1 + r)^n − 1], with the monthly rate and the number of payments over the amortization period, not the term.
Which calculator shows an amortization schedule with interest and principal for each month?
Any spreadsheet can, using the three-line method above. The calculator on this page shows payment, annual debt service and DSCR; ask lenders for their full schedule.
Is the calculator enough to make a decision?
No. It estimates debt service. Lenders also underwrite the property, LTV, your business and your credit, and their quote may use different assumptions.
What DSCR do lenders require?
Each lender sets its own minimum, and it can vary by property type and loan program. Ask for it in writing with the quote.
Where FSE fits
FSE is an independent business-funding brokerage compensated by its funding providers. FSE never charges the business any fee. If a property purchase or refinance leaves a gap in working capital or equipment, FSE compares offers from its lending partners in one application. Partners generally require at least 1 year in business and $10,000 or more in monthly revenue, and each lender sets its own terms. Apply with FSE to see your options.
Part of our Commercial Real Estate Financing guide.
More in this guide
- Commercial bridging loans
- Commercial real estate loan broker
- Largest and best commercial real estate lenders
- What is DSCR?
1.25 or higher: meets the minimum most lenders cite.
If the term is shorter than the amortization, the remaining balance is due as a balloon payment at maturity.
See real offers for $1,000,000 — no fee, no credit check to apply
Estimate only, not an offer. Actual terms depend on the lender and your file.