Calculate commercial mortgage payments, interest-only periods and the balloon due at maturity, with LTV against the supervisory limit and DSCR.
A permanent mortgage from a bank or credit union. Because the lender is an insured depository, the supervisory loan-to-value limits below apply to it.
Both are optional — leave them blank for a fully amortizing loan with no DSCR.
Maximum loan-to-value ratios that insured depository institutions may not exceed in their own internal lending policies. 12 CFR Part 365, Appendix A — Interagency Guidelines for Real Estate Lending Policies
| Loan Category | LTV Limit |
|---|---|
| Raw land | 65% |
| Land development | 75% |
| Construction — commercial, multifamily and other nonresidential | 80% |
| Construction — 1- to 4-family residential | 85% |
| Improved property | 85% |
Estimates for planning only, not a loan offer. Actual pricing, structure and underwriting vary by lender and property. The Interagency Guidelines caution that a loan inside a regulatory limit is not automatically a sound one. Confirm terms with your lender.
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Commercial mortgages rarely pay themselves off. A ten-year loan written on a twenty-five-year amortization schedule leaves most of the principal outstanding when the term ends, and that balance — the balloon — comes due as one payment. This calculator solves the payment at whatever frequency the note is billed, shows the balloon in plain figures, and measures your loan-to-value against the only limit any regulator publishes.
Two different clocks govern a commercial mortgage. The amortization period sets the size of the payment, as if the loan ran its full length. The term sets when the lender wants its money back. When the term is shorter than the amortization — the normal case for conduit, bridge and most bank commercial debt — the payment only ever retires part of the principal, and the remainder is repaid or refinanced at maturity. Add an interest-only period at the front and no principal is retired at all during it, so the balloon grows.
Commercial Loan Payment Formula
Test how term, amortization and rate move the payment and the balloon before you take a deal to a lender.
See exactly what balance falls due at maturity, and in which year, so the refinance is scheduled rather than discovered.
A cheap amortizing bank loan and an expensive interest-only bridge loan differ in more than rate. Compare the payment, the total interest and what is left owing.
Find out whether your requested loan sits inside the supervisory loan-to-value limit a bank works to, or above it.
Most commercial loan calculators bury the balloon among the outputs. Here it is the first thing you see, with the share of your original loan it represents, because refinancing that balance is the real event at maturity.
A quarterly-billed note is not a monthly payment multiplied by three. The payment is solved at the rate that actually applies to each period, so the schedule reaches zero instead of leaving a balance nobody expected.
Your loan-to-value is compared with the supervisory limits in 12 CFR Part 365, Appendix A — the interagency table that binds banks — rather than an invented band. Where a product sits outside that regime, we say so instead of inventing one.
An interest-only front end changes the payment, the interest total and the balloon at once. Enter the months and every figure and the schedule update together.
It is the loan balance still outstanding when the term ends. It arises whenever the term is shorter than the amortization period: the payment is sized for the longer schedule, so only part of the principal is repaid over the shorter term. A $2,000,000 loan on a ten-year term and twenty-five-year amortization at 7.25% leaves roughly $1.58 million due at maturity — about 79% of the original loan.
The amortization period sets the payment; the term sets the deadline. A 10/25 loan is priced as if it ran twenty-five years but matures in ten. If the two are equal the loan fully amortizes and nothing is due at the end.
The Interagency Guidelines for Real Estate Lending Policies (12 CFR Part 365, Appendix A) set supervisory limits that a bank's internal policy may not exceed: 85% on improved property, 80% on commercial and multifamily construction, 75% on land development and 65% on raw land. Banks may lend above a limit, but such loans are reported and capped as a share of capital. The guidelines add that a loan inside the limit is not automatically sound.
No. The supervisory limits bind insured depository institutions. Conduit loans are made by securitization trusts, bridge loans by debt funds and hard money loans by private lenders, none of which are covered. No public authority publishes a maximum for them, so each lender sets its own.
There is no published regulatory floor. 12 CFR Part 365 requires a lender to consider debt service coverage but sets no number, and requirements vary by lender, property type and market. This calculator reports the ratio rather than grading it; use the DSCR calculator to test a loan against the specific covenant your lender has set.
During it, every payment is interest and no principal is retired, so the payment is lower but the balance does not move. Amortization starts afterwards from the full original amount, which means a shorter remaining term to repay it in, a larger balloon, and more total interest.