Commercial Real Estate Loan Calculator

Commercial real estate loans help small-business owners buy, renovate or refinance commercial property without having to pay for it all upfront. But commercial mortgages come at a cost, and calculating those costs can be tricky, especially if you’re trying to compare multiple business loan offers.

Use our commercial real estate calculator and the instructions that follow to estimate monthly payments, interest costs, balloon payments and more.

1. Balloon payment. Select whether or not your loan has a balloon payment. Balloon payments are common with commercial mortgages. They allow you to make lower monthly payments during the loan term, but require a large lump sum at the end of the term to cover the remaining principal. 

2. Property price. Enter the total cost of the commercial property you’re trying to buy or build. If you’re refinancing an existing property, put the remaining loan balance here instead.

3. Down payment. If you have to pay part of the loan upfront, enter it as a dollar amount here.

4. Interest rate. This is the yearly interest rate your lender charges you to borrow money. If you know the loan’s annual percentage rate (APR), use that here instead. 

5. Loan term. This is how long you’ll have to make payments for. 

6. Amortization period (for balloon mortgages only). If your loan requires a balloon payment, enter the amortization period here. The amortization period should be longer than the loan term. Amortization periods for commercial balloon mortgages tend to range from 20 to 30 years, while loan terms typically last five to 10 years.

Once you hit “calculate,” the tool will automatically generate results. Feel free to adjust the numbers to explore different loan scenarios and hit the “start over” button to reset the loan details.

Commercial real estate loans help small-business owners fund expensive real estate projects, such as buying a warehouse or building a new restaurant. They can also be used to refinance existing commercial mortgages.

Because commercial property is so expensive, these loans provide a means for small-business owners to expand their physical footprint while preserving cash flow for other business needs. You receive a lump sum of money to buy or build the property and pay it back slowly over a set period of time, with interest. These loans typically require a down payment of at least 20% of the cost of the property.

Like personal mortgages, commercial mortgages are usually self-secured by the property itself. This means that if you fail to pay back your loan, the lender may take over your property to recover its losses.

Many commercial real estate loans also come with a balloon payment. This is a final principal payment that’s due at the end of your loan’s term.

Let’s say you have a commercial balloon mortgage with an amortization period of 25 years and a loan term of 10 years. You’ll make monthly payments as if you were paying it off over 25 years, even though the loan payments will stop after just 10 years. These payments include both interest and principal. But because your loan stops after just 10 years, you’ll have a large balance of unpaid principal due at the end. This is the balloon payment.

Because these final balloon payments are usually very large, this type of financing can be risky and is typically best-suited for small businesses with predictable future cash flows that can weather economic headwinds.