Commercial Loan Payment Calculator

Commercial mortgage payments are calculated using standard amortization formulas. The monthly payment equals the loan amount times the monthly rate times (1 + monthly rate) raised to the number of payments, divided by (1 + monthly rate) raised to the number of payments minus 1. Commercial loans often have shorter terms than their amortization, resulting in a balloon payment at maturity.

The loan term is how long the loan lasts before it must be repaid or refinanced. The amortization period determines the payment schedule. For example, a 10-year term with 25-year amortization means lower monthly payments but a large balloon payment due after 10 years.

An interest-only (I/O) period allows the borrower to pay only interest for a set period at the start of the loan. This reduces initial monthly payments and is common on bridge loans (full term I/O), construction loans, and some permanent loans (1-3 years I/O). After the I/O period ends, payments convert to fully amortizing.

As of early 2026, commercial mortgage rates range from 5.25% to 8.50% depending on loan type, property type, leverage, and borrower strength. Permanent loans from banks and life companies start around 5.25%-6.75%, while bridge loans range from 7.00%-12.00%.