Calculators
Commercial Mortgage Calculator
Calculate your monthly commercial mortgage payment, loan-to-value (LTV), and debt service coverage ratio (DSCR).
Loan Details
Optional: Income for DSCR
Results
Monthly Payment
What Is a Commercial Mortgage Calculator?
A commercial mortgage calculator estimates your monthly payment, total interest, and annual debt service for a commercial real estate loan — given the purchase price, down payment, interest rate, and loan term.
Unlike residential mortgages, commercial loans have several characteristics that make this calculation essential before approaching any lender:
- Shorter amortization periods — commercial loans typically amortize over 20–25 years, not 30
- Balloon payments — many commercial loans have a 5–10 year term with a balloon payment due at maturity, even if amortized over 25 years
- Higher down payments — most commercial lenders require 25–35% down, not 20%
- DSCR requirements — lenders verify the property's income covers the debt service before approving
This calculator handles the core payment math. Use the results alongside your NOI to check whether the deal qualifies for financing.
The Commercial Mortgage Payment Formula
Example:
- Purchase price: $1,500,000
- Down payment: 25% ($375,000)
- Loan amount: $1,125,000
- Interest rate: 7.5%
- Amortization: 25 years
Commercial Mortgage vs Residential Mortgage — Key Differences
| Feature | Commercial | Residential |
|---|---|---|
| Typical down payment | 25–35% | 3–20% |
| Amortization period | 20–25 years | 30 years |
| Loan term | 5–10 years (balloon) | 15–30 years (fully amortizing) |
| Qualifying criteria | Property income (DSCR) | Borrower income (DTI) |
| Interest rates | Higher by 1–3% | Lower |
| Prepayment penalty | Common (yield maintenance or defeasance) | Less common |
| Personal guarantee | Often required | Not required for conventional |
The most important difference: commercial lenders qualify the loan based on the property's income, not your personal income. A property with strong NOI and a DSCR above 1.25x will qualify regardless of the borrower's personal income situation.
What Lenders Look at Beyond the Payment
Running this calculator gives you the monthly payment number. But lenders evaluate four additional metrics before approving any commercial mortgage:
1. DSCR (Debt Service Coverage Ratio) Your annual NOI divided by your annual debt service. Most lenders require a minimum of 1.25x — meaning the property must generate 25% more income than its annual mortgage payments.
If your NOI is $120,000 and your annual debt service is $99,624:
In this case, you would need to either reduce the loan amount, negotiate a lower rate, or find a property with stronger income. Use our DSCR calculator to check this alongside your payment calculation.
2. Loan to Value (LTV) Most commercial lenders cap LTV at 65–75%. A $1.5M property with a $1.125M loan is 75% LTV — at the upper limit for most conventional lenders. Bridge lenders may go higher with compensating factors.
3. Debt Yield NOI divided by loan amount. Most lenders require a minimum of 8–10%. This metric is interest-rate independent — it does not change if rates move, making it a reliable underwriting benchmark.
Use our debt yield calculator to verify this.
4. Global Cash Flow Some recourse lenders also review the borrower's personal financial strength and existing debt obligations, especially on smaller deals.
Commercial Mortgage Rates in 2026
Commercial mortgage rates are higher than residential rates and vary based on loan type, property type, LTV, and borrower strength.
Typical ranges in 2026:
| Loan Type | Rate Range |
|---|---|
| Conventional bank (owner-occupied) | 6.5% – 8.5% |
| Conventional bank (investment) | 7.0% – 9.0% |
| SBA 504 (owner-occupied) | 6.0% – 7.5% |
| CMBS / conduit loan | 7.0% – 8.5% |
| Bridge loan | 9.0% – 12.0%+ |
| HUD / FHA multifamily | 5.5% – 7.0% |
| Fannie Mae / Freddie Mac multifamily | 6.0% – 7.5% |
Commercial rates are typically quoted as a spread over a benchmark — commonly the 10-year US Treasury or SOFR. As the benchmark moves, so does your rate unless you lock.
How to Qualify for a Commercial Mortgage
Step 1 — Calculate your NOI accurately Lenders use trailing 12-month actual income, not projections. Use our cap rate calculator to verify the property's income before applying.
Step 2 — Check your DSCR Run the payment through the DSCR calculator. If it comes in below 1.25x, adjust the loan amount before approaching a lender.
Step 3 — Prepare your documents Commercial loans require: 2 years of property operating statements, current rent roll, purchase contract, personal financial statement, 2 years personal and business tax returns, and entity documents.
Step 4 — Choose the right lender type
- Local banks and credit unions: most flexible, best for relationships, slower process
- National banks: competitive rates, more rigid underwriting
- CMBS lenders: best rates for stabilized properties over $5M, non-recourse
- SBA 504: best for owner-occupied commercial, lower down payment (10%)
- Bridge lenders: for transitional properties that do not yet qualify for permanent financing
Step 5 — Lock your rate Once you have a term sheet, lock your rate as quickly as possible. Commercial rates can move significantly between application and closing.
Frequently Asked Questions
What is the minimum down payment for a commercial mortgage? Most conventional commercial lenders require 25–30% down on investment properties. SBA 504 loans allow as little as 10% down for owner-occupied commercial real estate. Bridge and hard money lenders may allow less but charge significantly higher rates.
How is a commercial mortgage different from a residential mortgage? Commercial mortgages qualify based on the property's income (DSCR), not the borrower's personal income. They typically have higher down payments (25–35%), shorter loan terms with balloon payments, and higher interest rates than residential loans.
What credit score is needed for a commercial mortgage? Most conventional commercial lenders require a minimum personal credit score of 660–680. Some lenders go lower with strong property income and low LTV. CMBS loans focus primarily on property performance and may be more flexible on credit score for stabilized assets.
Can I get a 30-year commercial mortgage? Rarely for traditional commercial loans. Most commercial mortgages amortize over 20–25 years. SBA loans can go to 25 years. HUD multifamily loans can reach 35–40 years. Residential rental property loans (conventional) can be 30 years for 1–4 unit properties.
What is a balloon payment on a commercial mortgage? A balloon payment means the loan fully matures after a fixed term (typically 5–10 years) even though it was amortized over a longer period. At the balloon date, the remaining balance is due in full. Most borrowers refinance at this point. Always calculate your projected balance at balloon maturity when underwriting a deal.
Related Tools
- DSCR Calculator — Check whether your NOI supports the loan amount
- Debt Yield Calculator — Verify the debt yield meets lender minimums
- Cap Rate Calculator — Evaluate the property's return before financing
- NOI Calculator — Calculate net operating income from income and expenses
Rates and lending standards reflect current US commercial real estate market conditions as of May 2026. For informational purposes only. Consult a licensed commercial mortgage broker before making financing decisions.