Calculate your commercial loan payment
Change any input and the estimate updates immediately. The defaults show a $400,000 property with 25% down, a 10-year term amortized over 25 years and an illustrative 6.5% rate.
Results are estimates for a fixed-rate loan. Commercial terms vary widely by lender, property type and borrower.
How each input works
Purchase price and down payment
The loan is the price minus your down payment. Commercial lenders commonly lend up to about 75% to 80% of value, so the calculator warns you above 80% LTV. Owner-occupied programs such as SBA loans can go higher, but they are separate products.
Term versus amortization
This is the key difference from a home loan. The amortization sets the payment, as if the loan were repaid over, say, 25 years. The term is when the loan actually comes due, often 5, 7 or 10 years. At maturity the remaining balance, called the balloon, must be paid off, usually by refinancing or selling. If the term equals the amortization there is no balloon.
Interest-only
Tick the box to make every payment interest only. The payment drops, but the balance never goes down, so the balloon equals the full loan amount.
Taxes, insurance and dues
Entered yearly (taxes, insurance) or monthly (dues). They are added to show a full monthly cost; many commercial loans do not escrow them, but you still have to pay them.
Extra principal
Extra principal each month lowers the balloon and the interest paid during the term. The calculator shows both.
What the calculator assumes
- Fixed rate for the entire term, with monthly payments.
- Payment = the standard amortizing payment over the amortization period, or loan × rate ÷ 12 if interest-only.
- Balloon = the scheduled balance after the last payment of the term.
- No mortgage insurance and no upfront program fee.
- Warning above 80% LTV.
Worked example: 10-year balloon on a 25-year schedule
Loan amount: $400,000 − $100,000 down = $300,000, an LTV of 75%.
Principal and interest: $300,000 at 6.5% amortized over 25 years = $2,025.62 a month.
Taxes and insurance: $500.00 + $166.67.
Total monthly cost: $2,025.62 + $500.00 + $166.67 = $2,692.29, shown as $2,692.
Balloon: after 120 payments the balance is about $232,534, and about $175,609 of interest has been paid during the term.
With $100 extra a month: the balloon falls to about $215,694 and interest during the term falls by about $4,840.
A 5-year term on the same schedule leaves a balloon of about $271,686. Interest-only drops the payment to $1,625.00 ($300,000 × 6.5% ÷ 12), but the full $300,000 is due at maturity.
Planning for the balloon
A balloon is not a penalty, but it is a deadline. Before the term ends you will need to refinance, sell or pay off the balance. If rates are unchanged when you refinance, the $232,534 balance spread over the remaining 15 years of the original schedule keeps the payment at $2,025.62. If the new rate is 8%, the same balance over 15 years costs about $2,222.22 a month, roughly $197 more.
The lender will also re-underwrite the property's income and value at that point, so a lower appraisal or weaker rents can shrink the amount you can refinance. Try a shorter term, a lower LTV or extra principal in the calculator to see how much cushion you would have.
Planning a commercial purchase or refinance?
Tell LoanFight about the property, its income and the financing you need. We can connect you with lending partners that work on that property type.
Tell Us About Your Deal →What the calculator includes, and what it doesn't
Included: amortizing or interest-only payment, taxes, insurance, dues, LTV, interest paid during the term, the balloon balance and date, and the effect of extra principal.
Not included: debt service coverage (use the DSCR calculator for rental properties), net operating income, adjustable or reset rates, prepayment penalties or yield maintenance, origination fees, reserves, and the rate you will get when you refinance the balloon.
Commercial calculator FAQs
What is a balloon payment on a commercial loan?
It is the remaining balance due when the loan term ends before the loan is fully amortized. A 10-year term on a 25-year schedule leaves a large balance at year 10 that must be refinanced or paid off.
What is the difference between term and amortization?
Amortization is the schedule used to calculate the payment. Term is how long until the loan matures. When the term is shorter, a balloon is due.
How does interest-only affect the balloon?
With interest-only payments no principal is repaid, so the balloon equals the original loan amount unless you make extra principal payments.
What LTV do commercial lenders allow?
It varies by lender and property type, but conventional commercial loans often top out around 75% to 80%. The calculator warns above 80%.
Does this calculate DSCR?
No. Commercial lenders often compare net operating income with annual debt service. Use the payment from this calculator in that comparison, or the DSCR calculator for 1–4 unit rentals.
Can I avoid the balloon?
Set the term equal to the amortization to model a fully amortizing loan. Some lenders offer that structure; many commercial loans are written with a balloon.
Sources
- CFPB: What is a balloon payment? When is one allowed? — how balloon loans work.
- CFPB: Regulation Z §1026.3, exempt transactions — business-purpose credit is generally outside consumer mortgage rules.
Educational estimate only. LoanFight is not a lender, does not make credit decisions and does not set loan terms. The default interest rate is an illustration, not a rate quote. Your lending partner will provide actual figures on a Loan Estimate.