Free tool and guide
Commercial mortgage calculator payment, balloon, LTV and DSCR
Commercial loans rarely pay off the way home loans do: most have a balance due long before amortization ends. Enter the terms below to see the payment, the balloon, and the ratios a lender will test.
A commercial mortgage payment depends on the loan amount, rate and amortization, but the loan usually comes due earlier than it amortizes. A 30-year amortization with a 10-year term has a large balance due at year 10, which needs a sale or a refinance.
Commercial mortgage calculator
Enter a loan, rate, amortization, term and any interest-only period for the payment and the balance due, plus LTV, DSCR and debt yield if you add a value and NOI. It runs in your browser: your numbers are not uploaded, saved or tracked, and there is no sign-up.
Showing invented example numbers
- Monthly payment
- $31,603
- Annual debt service
- $379,241
- Mortgage constant 7.58%
- Balance due at the end of the term
- $4,238,806
- Loan-to-value
- 62.5%
- DSCR
- 1.37x
- Debt yield
- 10.40%
Worth a look
- $4,238,806 comes due at the end of the term. That balance needs a sale or a refinance.
Arithmetic only, with no market benchmarks. This is not a loan quote or advice.
Amortization, term and balloon
- Amortization is the schedule that sets the payment, as if the loan would run that long.
- Term is when the loan actually comes due.
- Balloon is the balance left when the term ends. Unless the term and amortization match, you will have one.
- Interest-only periods lower the early payments, and the balance does not fall while they run.
A worked example
A $5,000,000 loan at 6.5% with 30-year amortization pays $31,603 a month, or $379,241 a year. With a 10-year term, $4,238,806 is still owed at maturity. On $520,000 of NOI and an $8,000,000 value, that is 62.5% loan-to-value, 1.37x DSCR and a 10.40% debt yield.
The three tests that size a loan
Lenders commonly size to the lowest of three limits, and each has its own terms. Ask yours what they are for this property.
| Test | Formula | What it protects against |
|---|---|---|
| Loan-to-value | Loan / value | A fall in value |
| DSCR | NOI / debt service | Income not covering payments |
| Debt yield | NOI / loan | A loan too large for the income, at any rate |
See the DSCR calculator and the debt yield calculator to solve for the largest loan each one supports.
What a calculator leaves out
- Costs to close: origination fees, legal costs, appraisal and reports.
- Prepayment terms: yield maintenance, defeasance or step-downs can make early payoff expensive.
- Reserves and sweeps: lenders can hold back cash for taxes, insurance, repairs and rollover.
- Refinance risk: the balloon must be repaid at whatever rates and values exist then.
Frequently asked
- How is a commercial mortgage payment calculated?
- With the same formula as any amortizing loan, using the loan amount, the monthly rate and the amortization period. The difference is that the loan usually comes due before it fully amortizes.
- What is a balloon payment on a commercial loan?
- The balance left when the term ends. A 10-year term on 30-year amortization leaves most of the principal still owed at year 10.
- What is a mortgage constant?
- Annual debt service divided by the loan amount. It lets you compare loans, and it is what connects a DSCR to a loan size.
- Is this a loan quote?
- No. It is arithmetic on the terms you enter. A lender's offer depends on the property, the borrower and the market.
Keep reading
DSCR calculator
Debt service coverage, and the largest loan a DSCR supports.
Debt yield calculator
The lender's rate-free test of a loan's size.
Cash-on-cash calculator
Year-one cash return on the cash you put in.
Pacific Software Ventures built this tool and guide, and sells AI consulting and training to commercial real estate firms. This is general education, not investment, legal or tax advice.
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