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Commercial mortgage calculator
A commercial mortgage payment depends on the loan amount, the rate and the amortization schedule. The term is usually shorter than the amortization, so part of the loan is still owed at maturity as a balloon. Enter both, plus any interest-only months, and this calculator shows the monthly payment, the interest-only payment and the balloon you will need to refinance or repay.
What does a sample commercial mortgage cost each month, and what is left at maturity?
| Input | Value |
|---|---|
| Loan amount | $2,000,000 |
| Interest rate | 7.00% |
| Amortization (zero = interest-only) | 300 months |
| Term to maturity | 120 months |
| Interest-only months at the start | 0 months |
Monthly payment$14,136
See the worked example
- Monthly rate: 7.00% ÷ 12 ≈ 0.583% a month.
- Payment on $2,000,000 over a 300-month amortization: about $14,136 a month, or $169,627 a year.
- Interest-only alternative at the same rate: $2,000,000 × 0.583% ≈ $11,667 a month.
- After 120 payments the loan has repaid about $427,332 of principal and paid about $1,268,938 of interest.
- Balance due at maturity: about $1,572,668. That is the balloon.
A ten-year term on a 25-year amortization leaves about 79% of the loan due at maturity, so the exit plan matters as much as the payment. A 24-month interest-only start on the same loan would cut the first two years of payments to $11,667 and raise the balloon to about $1,683,488.
How is a commercial mortgage payment calculated?
Monthly rate (r) = Annual rate ÷ 12 Payment = Loan × r ÷ (1 − (1 + r)^−n) n = Amortization months when the amortization runs past maturity; otherwise amortization months − interest-only months Interest-only payment = Loan × r Balloon = Balance left after the amortizing payments made before maturity
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How do you read the result?
The payment is set by the amortization, so a longer schedule lowers it and a shorter one raises it. When the amortization runs past maturity, the term only decides when the remaining balance comes due. Two quotes at the same rate can carry very different payments if one amortizes over a longer schedule, and the longer schedule also leaves a larger balloon.
Read the balloon as the size of your exit. It has to be refinanced or repaid at maturity, at whatever rates, values and lender appetite exist then. When the balloon is close to the original loan, the deal depends on a refinance or a sale, so plan that exit and the cash it may need before you sign.
Why does a commercial mortgage end in a balloon payment?
Most commercial loans mature before they fully amortize, so the payment schedule and the due date are set separately. A loan can amortize like a long mortgage while coming due years earlier, and whatever the schedule has not yet repaid is the balloon.
An interest-only period starts amortization later. When the amortization runs past maturity, that raises the balloon. When it ends by maturity, the loan is paid down over the months left after the interest-only period instead, so the payment rises and nothing is owed at maturity. Compare the interest-only payment with the amortizing payment above to see how much cash the interest-only period saves each month, and what it costs later.
Frequently asked questions
How do I calculate a commercial mortgage payment?
Divide the annual rate by twelve, then apply the standard payment formula over the amortization schedule in months (less any interest-only months, when the amortization ends by maturity). Enter the loan, rate and amortization above and the calculator does it, along with the interest-only payment and the balloon at maturity.
What is the difference between the amortization and the term?
The amortization sets the payment as if the loan would be paid off over that schedule. The term sets when the loan actually comes due. When the term is shorter, the balance left at the end of the term is the balloon.
How large is the balloon payment on a commercial loan?
It is the balance left after the payments made before maturity. When the amortization runs past maturity, a shorter term, a longer amortization or an interest-only start all raise it. Enter your term and amortization above to see the figure for your loan.
Does an interest-only period lower the total cost of the loan?
It lowers the payment while it lasts, but no principal is repaid during it, so more interest accrues over the term. On a loan that matures before it amortizes, the balloon is larger; on one that amortizes by maturity, the later payments are higher. The interest-only payment above shows the monthly saving; the balloon shows what it costs at maturity.
What does YieldStack do?
YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Every term sheet comes from a lender in the network and is subject to that lender's underwriting. YieldStack (yieldstack.ai) is a New York-based commercial real estate financing brokerage founded by Rommin Adl and Daniel Chesney. It has no connection to yieldstack.co or to any cryptocurrency, token or yield product using a similar name.
Does it cost anything to see terms?
No. 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.
Is financing guaranteed?
No. 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.
Where does YieldStack operate?
Nationwide. YieldStack arranges commercial real estate financing nationwide. Every deal is business-purpose commercial financing, and the broker fee is paid only at closing.
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YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors.