Commercial Real Estate Loan Calculator

A commercial mortgage pulls apart two numbers that a 30-year home loan collapses into one: the loan term and the amortization period. The amortization is the schedule used to size your monthly payment; the term is how long the loan contract actually runs before the balance comes due. On a home loan these are the same number. On a commercial loan they almost never are — most stabilized deals pair a 5-, 7-, or 10-year term with a 20- to 25-year amortization, as we cover in commercial real estate loan terms.

Here is why the gap matters. Take a $1,000,000 loan at 7.25% on a 25-year amortization: the payment is about $7,228 per month. That long amortization is what keeps the deal cash-flowing. But if the loan carries a 10-year term, you make that payment for a decade and still owe roughly $791,800 — because a 25-year schedule has barely dented the principal by year 10. That remaining balance is your balloon.

Lenders shorthand this as a “10/25” — a 10-year term on a 25-year amortization. Shortening the amortization raises the monthly payment but shrinks the balloon; lengthening it does the reverse. The calculator above lets you move both and watch the trade-off.

A balloon payment is the entire remaining loan balance, due in one lump sum when the term ends. It exists because the loan amortizes on a longer schedule than its term, so it is not paid off when the term matures. When the balloon comes due, you cover it one of three ways: refinance into a new loan, sell the property, or pay it offfrom other capital. Refinancing is the common outcome, which means your exit is exposed to whatever rates and lending standards exist on that future date, not today’s.

That refinance is not automatic. When the balloon comes due, the lender re-underwrites you from scratch— the property’s cash flow, the loan-to-value at that point, and your personal balance sheet all get a fresh look. A wall of balloon debt is maturing into a tighter market: the Mortgage Bankers Association counted about $875 billion of commercial and multifamily mortgage debt scheduled to mature in 2026, most of it re-qualifying at today’s tougher standards, per our write-up on commercial real estate loan qualifications. The cushion you show at that refinance is what keeps the balloon from becoming a scramble.

Two structures skip the balloon entirely: the SBA 7(a) real-estate loan fully amortizes over up to 25 years, and the SBA 504 CDC debenture fully amortizes over 10, 20, or 25 years. For an owner-occupant planning to hold the building, that removes the refinance risk that defines most CRE debt — model it in the SBA loan calculator.

The same property can carry very different terms depending on who lends. Here is how the major sources typically stack up on term, amortization, and loan-to-value.

A payment you can afford is only the starting point. Commercial lenders qualify two things at once — the property and you — and the payment math feeds into three checks:

• Loan-to-value (LTV). The loan divided by the appraised value. Conventional bank and CMBS loans typically cap LTV at 65% to 75%, so you usually bring 25% to 35% equity. Enter a purchase price in the calculator to see your LTV and implied down payment.
• Debt-service coverage (DSCR).Whether the property’s net operating income covers the payment with a cushion. Most conventional lenders want at least 1.20x to 1.25x. This calculator gives you the payment; run it through the DSCR calculator to check whether the deal qualifies.
• Guarantor strength.On a recourse loan — most bank and all SBA loans — the lender underwrites your personal balance sheet alongside the property’s, weighing net worth and post-close liquidity heavily. Virtually every CRE lender requires a Personal Financial Statement from each guarantor before issuing a term sheet.