Commercial Mortgage Calculator
Work out the payment on a commercial property loan with an amortization period longer than the term, the balloon payment due at maturity, and the DSCR. Enter the price and LTV or the loan, the rate, the amortization and the term separately, and see the balloon payment, the interest over the term, the DSCR and debt yield from your NOI, and a year-by-year schedule you can download.
Your numbers
With a typed loan amount it is optional and shows the loan to value.
The lender's quote, as a percent of the value.
Fixed for the term.
Sets the payment.
When the balloon is due.
Optional. 0 for none.
Optional: for the DSCR and debt yield. Income after vacancy and operating expenses, before the loan.
Monthly payment (principal and interest)
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- Balloon due at maturity (year 10)
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- Total interest over the 10 years
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- Total paid, payments plus balloon
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- Loan amount
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An estimate from the numbers you typed, at a fixed rate. Not financial advice: each lender sets its own loan to value, DSCR and debt yield limits, fees and prepayment terms.
The calculation runs in your browser and ParrotNotes does not store your numbers. They sit in the page address so you can bookmark or share the result.
How the payment and the balloon are worked out
The loan is the price × the loan to value (LTV), or the amount you type. The monthly payment amortizes it over the amortization period: payment = loan × r ÷ (1 − (1 + r)^−n), r = rate ÷ 12, n = amortization years × 12. Each month the interest is the balance × r and the rest of the payment repays principal. At the end of the term, whatever is still owed is the balloon.
Worked example: a $2,000,000 property at 65% LTV is a $1,300,000 loan. At 7% on a 25-year amortization the payment is $9,188.13 a month. After the 10-year term, 120 payments have paid $824,809.70 of interest and $277,765.85 of principal, and $1,022,234.15 is due as the balloon. All in, payments plus balloon come to $2,124,809.70.
Interest-only months up front
Some commercial loans start with interest-only payments: balance × rate ÷ 12, with no principal repaid. In this calculator the level payment starts after those months and still amortizes the loan over the full amortization period, so the balloon at maturity is larger.
On the example loan, 24 interest-only months cost $7,583.33 a month, then $9,188.13. The balloon after 10 years grows to $1,094,267.02 and the interest over the term to $858,327.45. The OCC tells examiners that interest-only terms can raise the balloon or full repayment risk at maturity, that interest-only loan tenors are typically shorter than amortizing ones, and that the property should still meet the bank's debt service coverage as if the loan were amortizing. That is why the DSCR here is shown on the amortizing payment, with the interest-only DSCR beside it.
DSCR and debt yield from the NOI
Add the property's annual net operating income to see two ratios lenders and bank examiners use. DSCR is NOI ÷ annual debt service: above 1.00 the property's income covers the payments. Debt yield is NOI ÷ loan amount, as a percent: lower means more leverage. With $150,000 of NOI on the example loan, DSCR is 1.36 and debt yield 11.5%.
There is no single minimum. The OCC's handbook says an appropriate DSCR depends on the amortization period and how volatile the cash flow is, and that debt yields vary with market conditions and property type, with higher debt yields for riskier properties. Ask the lender for its LTV, DSCR and debt yield limits and test them here.
What this calculator does not do
It assumes a fixed rate, interest on rate ÷ 12 each month, and payments on schedule. Some notes count interest on an actual/360 basis (rate ÷ 360 a day), which costs a little more over a year; the interest-only loan calculator shows the difference. Prepayment penalties, yield maintenance or defeasance, fees and reserves are left out. It does not know any lender's limits or how it will underwrite your NOI. Use it to compare structures and to prepare for the lender call, not as a loan quote.
Sources, read on 2026-10-26:
- OCC, Comptroller's Handbook: Commercial Real Estate Lending, version 2.0 (March 2022): "Amortization" and footnote 48, p. 40; "Debt-Service Coverage Ratio" and "Debt Yield", p. 43; glossary, "Balloon payment"
- CFPB, What is a balloon payment? When is one allowed?
Sizing the deal? The cap rate calculator works out NOI ÷ price and cash on cash return, the DSCR calculator shows the largest loan the income supports at a target DSCR, and the interest-only loan calculator shows the payment jump when principal starts and actual/360 interest.
More for commercial real estate: How commercial real estate brokers document tours and client calls, Investor meeting notes: what to capture, Property inspection notes by voice.
The terms come from the lender call
The rate, the amortization, the term and any interest-only months are quoted on the lender call. Record it in ParrotNotes and get a structured note, a summary and the action items, so the terms are in the note. Free for 100 minutes of recording a month.
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