Commercial Mortgage Calculator: Payment on Office, Retail, or Industrial Property
Work out the monthly payment and total interest on a commercial mortgage — the financing structure behind office, retail, industrial, and multifamily real estate.
Adjust the inputs and select Calculate for a full breakdown.
Year-by-year amortization schedule
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Monthly payment | Total interest | Total of payments |
|---|---|---|---|
| $1M · 7% · 20-year | $7,752.99 | $860,717.45 | $1,860,717.45 |
| $500k · 8% · 25-year | $3,859.08 | $657,724.33 | $1,157,724.33 |
| $5M · 6.5% · 30-year (multifamily) | $31,603.40 | $6,377,224.42 | $11,377,224.42 |
| $250k · 8.5% · 15-year | $2,461.85 | $193,132.80 | $443,132.80 |
How This Calculator Works
Enter the loan amount, the APR, and the amortization term. The calculator turns the APR into one constant monthly payment using the amortization formula and shows total interest paid. Commercial loans often amortize over 20 to 25 years with a balloon at year 5 or 10 — set the term to match the amortization, and remember the balloon when planning refinancing.
The Formula
Fixed-Rate Amortization
P = loan amount, r = monthly rate (APR ÷ 12), n = number of monthly payments
Worked Example
A $1,000,000 commercial mortgage at 7% APR over 20-year amortization gives a monthly payment of about $7,753. Total payments come to roughly $1,861,000 over the full term — interest adds about $861,000. On a 5-year balloon with the same 20-year amortization, the balance at year 5 is what you'll need to refinance.
Key Insight
Commercial mortgages diverge from residential in three ways: shorter balloon term despite long amortization, recourse vs non-recourse structure, and rate tied to property cash flow rather than borrower W-2 income. The DSCR (debt service coverage ratio) the lender demands — typically 1.20x to 1.35x — sets the maximum loan they will originate, often binding before LTV does. Pro forma the property's NOI conservatively when running the numbers.
Frequently Asked Questions
How is a commercial mortgage different from residential?
Commercial mortgages typically require 25%+ down, run shorter balloon terms (5 to 10 years) with longer amortization (20 to 25 years), and are underwritten primarily on the property's cash flow (DSCR) rather than the borrower's W-2 income.
What is DSCR?
Debt service coverage ratio — annual NOI divided by annual debt service. Commercial lenders typically require 1.20x to 1.35x, meaning NOI must cover debt service by 20% to 35%. DSCR often caps loan size before LTV does.
What is a balloon payment?
The remaining principal balance due at the end of the term, even though the loan amortizes over a longer period. A 25-year amortization with 5-year balloon means you pay as if the loan were 25 years but owe the full remaining balance at year 5 — either refinance or pay off.
Are commercial loans recourse or non-recourse?
Both exist. Recourse holds the borrower personally liable beyond the property; non-recourse limits the lender to the property itself. CMBS loans are typically non-recourse with carve-outs; local bank commercial loans usually recourse.
What rate spread over Treasuries is typical?
Commercial mortgages commonly price at 10-year Treasury plus 2.0% to 3.5% spread. The spread varies by property type, leverage, and borrower strength. Multifamily and Class A office typically narrowest; retail and hotels widest.
Related Calculators
Data Sources & Benchmarks
This calculator draws on 2 independent, dated sources.
Methodology & Review
Payments use the standard fixed-rate amortization formula. The calculator assumes a fixed APR over the term. Commercial mortgages commonly have shorter amortization on a longer balloon term — for example, 25-year amortization with a 5- or 10-year balloon. Adjust the term input to match your loan structure.
Written by Ugo Candido · Last updated May 17, 2026.