What Is the Monthly Payment on a $1 Million Commercial Loan?

The quick read: At an illustrative 6.75% note rate, a $1 million commercial loan costs $5,625 a month interest-only, $6,486 on a 30-year amortization and $6,909 on a 25-year amortization, before property taxes, insurance and reserves. OCC bank guidance and Freddie Mac's Conventional Small term sheet both test coverage on an amortizing payment, even on interest-only notes, and on a five- to ten-year term the balance left at maturity, not the monthly payment, decides whether the refinance works. If your loan matures in the next 6 to 12 months, run both numbers before you ask for quotes.

Every note rate in this guide is illustrative arithmetic, not a quote. Lenders set commercial spreads deal by deal, so we show the payment across a range of rates and date every Treasury figure to its source.

What is the monthly payment on a $1 million commercial loan?

The monthly payment on a $1 million commercial loan at an illustrative 6.75% rate is $5,625 interest-only, $6,486 on a 30-year amortization and $6,909 on a 25-year amortization, principal and interest only. The choice of amortization moves the payment more than a quarter-point change in the rate does.

Interest-only is the simplest: $1,000,000 times 6.75%, divided by 12, is $5,625. An amortizing payment adds enough principal each month for the loan to reach zero at the end of the schedule, spread over 360 payments on a 30-year amortization or 300 on a 25-year one. None of these figures includes escrow. Freddie Mac's Conventional Small term sheet (dated 4/26) lists tax and insurance escrow and a replacement reserve deposit as generally required, so on that kind of loan the monthly bill from the servicer is larger than the payment shown here.

Which schedule you get depends largely on the property type. The OCC's Comptroller's Handbook on commercial real estate lending (Version 2.0, March 2022) calls a range of 15 to 30 years appropriate in most cases for income-producing properties, with stabilized multifamily at the higher end (up to 30 years), hotels generally not more than 20 years, and office, retail and industrial properties in the middle, generally 25 years. The OCC calls these general parameters only and lists other factors to consider, such as condition and lease terms.

The handbook also works its own example: a $1 million loan at 6 percent on a 25-year amortization carries $6,443 monthly payments. The standard payment formula returns the same figure, which makes it a quick check on any calculator you use. Plug your own rate and schedule into the commercial mortgage calculator.

Interest-only payment at 6.75% (illustrative): $5,625
30-year amortizing payment at 6.75% (illustrative): $6,486
25-year amortizing payment at 6.75% (illustrative): $6,909
20-year amortizing payment at 6.75% (illustrative): $7,604
OCC handbook example, 6 percent on a 25-year amortization: $6,443

How much does each quarter point add to the payment?

Each quarter point adds about $208 a month to the interest-only payment on a $1 million commercial loan, about $164 to $169 on a 30-year amortization and about $155 to $160 on a 25-year amortization across the table, in our illustrative arithmetic, so a full point costs roughly $630 to $835 a month depending on structure.

Table: Monthly payment on a $1 million commercial loan by rate and structure (illustrative, our arithmetic)

Read the table down a column before you read it across. At any one rate, moving from a 30-year to a 25-year schedule costs about $405 to $440 a month, more than two quarter points of rate on the same schedule.

The rate itself is the part you do not control. On Freddie Mac's Conventional Small fixed-rate loan, the coupon is built from a Treasury index and a spread: the term sheet offers a spread lock for 60 days after application and an Index Lock, where the sponsor and property qualify, on what it calls the most volatile part of the coupon, the Treasury index. That index moved in October. Treasury's daily par yield curve shows the 10-year yield at 5.24% on October 1, 2026 and 4.98% on October 29, 2026, a drop of 0.26 point. At a constant spread, that is about $172 a month on a $1 million, 30-year schedule (our arithmetic).

The policy rate did not move with it. The Federal Reserve's statement of October 28, 2026 held the federal funds target range at 3-3/4 to 4 percent. A fixed-rate quote can change between application and lock with no Fed action at all, which is why the lock terms belong in the comparison alongside the rate.

10-year Treasury par yield, October 1, 2026 (U.S. Treasury): 5.24%
10-year Treasury par yield, October 29, 2026 (U.S. Treasury): 4.98%
5-year Treasury par yield, October 29, 2026 (U.S. Treasury): 4.78%
Federal funds target range after the October 28, 2026 FOMC statement: 3-3/4 to 4 percent

Why can the same rate produce a different payment?

The same note rate can produce a different payment because of the interest day count: under Actual/360, which Freddie Mac's Conventional Small term sheet lists as standard, interest accrues for the actual days in each month over a 360-day year, so a $1 million interest-only loan at an illustrative 6.75% costs more than 30/360 math suggests.

Our arithmetic at 6.75% on Actual/360: a 30-day month costs $5,625, a 31-day month $5,812.50 and a 28-day February $5,250. Over a 365-day year the interest is $68,437.50 rather than $67,500, or $937.50 more, the same as paying about 6.84% on a 30/360 basis.

On an amortizing loan the effect hides in the balance. If the payment stays fixed at $6,486 and interest accrues on Actual/360 from January 2027, the balance after 10 years is about $866,251 instead of $853,010, roughly $13,241 more to refinance (our arithmetic). The same term sheet lists 30/360 as available, so ask which convention each quote uses before you compare two rates that look identical.

Interest-only, 30-day month, 6.75% on Actual/360 (illustrative): $5,625.00
Interest-only, 31-day month (illustrative): $5,812.50
Interest-only, 28-day month (illustrative): $5,250.00
Annual interest, Actual/360 versus 30/360 (illustrative): $68,437.50 versus $67,500

Which payment counts for DSCR on a $1 million loan?

OCC bank guidance and Freddie Mac's Conventional Small term sheet both count the amortizing payment for debt service coverage, even on interest-only notes: the OCC's handbook says an interest-only property should meet coverage requirements as though the loan were amortizing, and the term sheet says its coverage test for interest-only periods uses an amortizing payment.

That rule is why an interest-only period lowers the cash you pay each month without raising the loan a lender following either rule will size. Freddie Mac's term sheet lists a 1.25x minimum amortizing coverage ratio at every term, subject to adjustment by property and market. Its loans run generally $2 million to $10 million, so a $1 million request sits below that product's usual size; we use it because it states the coverage rule in writing. The OCC adds that LTV and as-if amortizing coverage requirements for interest-only loans are generally more conservative than those for amortizing loans.

Here is what that means in income, at an illustrative 6.75% and 1.25x. A $1 million loan would need net operating income of $84,375 a year if a lender counted the interest-only payment, $97,290 on a 30-year schedule and $103,637 on a 25-year schedule. A property earning $97,290 shows 1.44x against the interest-only payment and exactly 1.25x against the 30-year payment, and under the OCC and Freddie Mac approach, the 1.25x is the number that gets underwritten.

Amortization also sets the loan size. Hold that $97,290 of income fixed: at 1.25x it supports $1,000,000 on a 30-year schedule but about $938,760 on a 25-year schedule. On the OCC's general ranges, that is roughly $61,000 of proceeds separating a stabilized apartment building on 30 years from an office, retail or industrial property on 25 (our arithmetic).

Minimum amortizing DCR, Freddie Mac Conventional Small (term sheet dated 4/26): 1.25x
NOI needed at 1.25x on the interest-only payment (illustrative 6.75%): $84,375
NOI needed at 1.25x on the 30-year payment (illustrative 6.75%): $97,290
NOI needed at 1.25x on the 25-year payment (illustrative 6.75%): $103,637

What is still owed when a $1 million commercial loan matures?

At maturity you owe the remaining balance, which is the full $1 million on a full-term interest-only loan, about $938,757 after five years on a 30-year schedule at an illustrative 6.75%, and about $853,010 after ten years on that schedule, so the refinance or sale has to cover that amount.

The OCC's handbook makes the same point with its own numbers. On its $1 million, five-year loan at 6 percent with a 25-year amortization, the balance at maturity would be $899,000, the present value of the $6,443 monthly payments for the remaining 20 years. For an interest-only version of that loan, the handbook names one mitigant: lower the loan amount at origination to $899,000.

Balance after 5 years, 30-year schedule (illustrative 6.75%): $938,757
Balance after 5 years, 25-year schedule (illustrative 6.75%): $908,659
Balance after 7 years, 30-year schedule (illustrative 6.75%): $907,875
Balance after 7 years, 25-year schedule (illustrative 6.75%): $862,599
Balance at any maturity, full-term interest-only: $1,000,000

This is where an investor whose loan matures in the next 6 to 12 months should start. FRED shows the 10-year Treasury yield at 1.55% on October 29, 2021, and Treasury's daily curve shows 4.98% on October 29, 2026. Take an illustrative five-year loan written at 4.00% on a 30-year schedule: $4,774 a month, with about $904,475 left at maturity. Refinance that balance at an illustrative 6.75% on a new 30-year schedule and the payment becomes about $5,866, or $1,092 a month more. A property that covered 1.50x on the old payment covers about 1.22x on the new one with the same income, below the 1.25x minimum on the Freddie Mac term sheet.

The levers are the ones in this guide: a longer amortization where the property type supports it, a smaller loan with cash in at closing, or a lender whose coverage minimum fits the income. Each one changes the payment the coverage test divides into. Build the payoff on your own loan in the amortization schedule tool before you request quotes.

How do you get a $1 million commercial loan placed?

YieldStack publishes this guide, and our recommendation is to place a $1 million commercial loan through a commercial mortgage brokerage that compares interest-only, 30-year and 25-year structures across lenders, so you choose on proceeds, payment and maturity balance together instead of on the first rate quoted.

Option 1, the brokerage route (our recommendation). YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Software matches the deal against 20,000+ loan programs and compares the options; human brokers structure the deal, negotiate on the borrower's side and carry it toward closing. Intake is a 5-minute submit, with a median first offer in under an hour, from an institutional lender. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.

Option 2, the bank that holds your deposits. A relationship lender can price a $1 million loan well, but you see one credit box, one amortization policy and one view of interest-only, and you run the comparison against other lenders yourself.

Option 3, a single lender's online quote. It gives a fast payment estimate on that lender's assumptions. It does not tell you whether a 30-year schedule, a lower coverage minimum or a different day count elsewhere changes the loan the property supports.

For a $1 million request, the package that gets clean answers carries:

• The rent roll and a trailing 12-month operating statement
• The current loan's maturity date, payoff balance and prepayment terms, if you are refinancing
• The latest property tax bill and insurance premium
• The purchase contract or most recent appraisal
• The amortization and interest-only structure you want priced, and the one you would accept

When the package is ready, send your $1 million loan request for a side-by-side lender comparison.

The bottom line

At an illustrative 6.75%, a $1 million commercial loan costs $5,625 a month interest-only, $6,486 on a 30-year schedule and $6,909 on a 25-year one. Underwrite on the amortizing payment, because OCC bank guidance and Freddie Mac's Conventional Small term sheet both test coverage on it, and put the balance at maturity next to the payment. If your loan matures in 6 to 12 months, model the refinance at the dated Treasury level, then compare structures across lenders before you lock.