Commercial Mortgage Calculator
Calculate monthly payments, DSCR, and total costs for commercial real estate loans. Compare different loan terms and interest rates side by side.
How to Use This Calculator
- Enter the loan amount — The total mortgage you need for the commercial property.
- Enter the interest rate — Commercial mortgage rates are typically higher than residential (currently 6.5-9.5%).
- Select the loan term — Common commercial terms are 5, 7, 10, 15, 20, or 25 years. Note: many commercial loans have a balloon payment after 5-10 years.
- Enter the NOI (Net Operating Income) — Optional, but needed to calculate your Debt Service Coverage Ratio (DSCR).
- Click Calculate — See your monthly payment, total cost, DSCR, and amortization details.
What Is a Commercial Mortgage?
A commercial mortgage is a loan used to purchase, refinance, or develop commercial real estate — including office buildings, retail spaces, warehouses, multi-family properties (5+ units), and mixed-use buildings.
Unlike residential mortgages, commercial loans typically have:
- Shorter terms — 5-20 years vs. 30 years for residential
- Higher interest rates — 1-3% above residential rates
- Larger down payments — 20-35% vs. 3-20% for residential
- Balloon payments — Many commercial loans require a lump sum at the end
- DSCR requirements — Lenders typically require a DSCR of 1.25 or higher
What Is DSCR (Debt Service Coverage Ratio)?
DSCR measures whether a property's income can cover its debt payments. It's calculated as:
DSCR = NOI / (Monthly Payment × 12)
A DSCR of 1.0 means the property's income exactly covers the mortgage. Most lenders require at least 1.25x, meaning the property generates 25% more income than needed for the mortgage payment.
DSCR Guidelines
- Below 1.0 — The property doesn't generate enough income to cover the mortgage (negative cash flow)
- 1.0 - 1.24 — Barely covers the mortgage; most lenders will reject
- 1.25 - 1.49 — Acceptable for most lenders
- 1.50+ — Strong; preferred by lenders and indicates good cash flow buffer
Commercial Mortgage Rates in 2025
Commercial mortgage rates vary significantly based on property type, loan amount, and your financial profile:
- Multi-family (5+ units): 6.5% - 8.0%
- Office buildings: 7.0% - 9.5%
- Retail spaces: 7.0% - 9.0%
- Industrial/Warehouse: 6.5% - 8.5%
- SBA 504 loans: 5.5% - 7.0% (for owner-occupied)
Rates are typically 50-200 basis points above the 10-year Treasury yield. Your actual rate depends on your credit score, DSCR, loan-to-value ratio, and property type.
Commercial vs Residential Mortgages
- Down payment: Commercial requires 20-35% down vs. 3-20% for residential
- Loan term: Commercial 5-25 years vs. Residential 15-30 years
- Amortization: Commercial loans may have 25-30 year amortization with a balloon payment after 5-10 years
- Underwriting: Commercial focuses on property income (DSCR); residential focuses on borrower income (DTI)
- Prepayment: Commercial loans often have yield maintenance or defeasance penalties