Loan Commercial Calculator
Most commercial loans are not simple amortising loans: they pair a long amortisation schedule with a short term, a balloon balance, an interest-only stretch or an origination fee, and each choice changes the real cost. Enter the amount, rate, amortisation term, structure, fee and payment frequency, and this calculator returns the payment, the balloon balance, the totals with the fee included and a first-year amortisation schedule. You type in your own rate, so the tool never goes stale when market rates move.
Planning estimate only. Excludes reserves, taxes and insurance escrows. Balloon and interest-only structures carry refinancing risk. Not financial advice.
Quick Answer
A $500,000 commercial loan at 6.5% on a 20-year amortisation with a 5-year balloon, a 1% origination fee and monthly payments costs $3,727.87 a month. After 60 payments the balloon balance is $427,945.60, total paid is $651,617.54, and total cost with the $5,000 fee is $656,617.54. The calculator above is pre-filled with this exact loan, and every figure in this box reproduces in it.
Key takeaways
- Term and amortisation are different numbers on most commercial loans. The payment comes from the long amortisation; the balloon comes due at the short term.
- The balloon is counted once here: 60 payments plus the remaining balance. Tools that add a full 240 payments and then the balloon again double-count the principal.
- The origination fee changes total cost, never the payment. A cheaper rate with a 2% fee can cost more overall than a higher rate with no fee.
- Interest only is the cheapest monthly payment and the most expensive way to hold the same loan: $650,000 of interest on this example if it ran the full 20 years.
- Quick Answer
- How to use the commercial loan calculator
- The formulas behind the payment, balloon and totals
- Worked example: the same $500,000 loan in all three structures
- Balloon loans: the term is not the amortisation
- Interest only: the cheapest payment, the dearest hold
- Why the origination fee belongs in the total
- What competing calculators miss
- Frequently asked questions
- Add This Calculator to Your Website
- References
How to use the commercial loan calculator
Start with the structure your lender is actually offering, because the same amount and rate produce three very different loans. Results stay hidden until you click Calculate.
- Loan amount and rate: copy both from the term sheet. If you are still shopping, sanity-check the quoted rate against current commercial loan rates first, then run your own figure here. This tool stores no rate table, so nothing in it can quietly go stale.
- Amortisation term: the long schedule behind the payment, 20 years in the example. This is not when the loan ends on a balloon structure.
- Amortisation type: pick Balloon and a second field appears for the balloon year. Pick Interest only and the payment becomes one period of interest on the full balance.
- Origination fee: enter the fee percentage from the quote. Blank counts as zero; the fee shows up in Total cost only.
- Payment frequency: monthly is the commercial norm. Quarterly or annual payments raise total interest slightly, and the first-year schedule disappears because the schedule is a monthly view.
- Read the totals, not just the payment: Total paid counts every scheduled payment plus any balloon. Total interest is Total paid minus the amount borrowed. Total cost adds the fee.
Before signing, check the payment against the property or business income that has to carry it: the debt headroom calculator shows how much borrowing room a covenant or cash-flow limit leaves you, which is the number that decides whether a balloon refinance in five years is comfortable or tight.
The formulas behind the payment, balloon and totals
Three formulas do all the work: the standard amortising payment, a payment-by-payment walk to the balloon date, and a simple interest-only multiplication.
Balloon balance = the balance left after running that payment, period by period, to the balloon date
Interest-only payment = P × r
Total cost = Total paid + (Loan amount × fee %)
The amortising payment formula is the one lenders and the Consumer Financial Protection Bureau’s amortization guidance describe: each payment covers the period’s interest first, and the rest reduces the balance, so the interest share shrinks over time. The balloon needs no separate formula. The tool walks the balance down payment by payment and reports what is left, which is why the balloon on the worked example, $427,945.60, matches a hand-built schedule to the cent. At a 0% rate the payment formula divides by zero, so the tool falls back to principal divided by the number of payments for amortising and balloon loans, and to a $0.00 payment for interest only, because 0% of any balance is zero. Two honest limits: the tool applies no maximum rate or term, so a typo like 65 instead of 6.5 produces a huge but internally consistent answer, and the fee is treated as paid at closing, not financed into the balance.
Worked example: the same $500,000 loan in all three structures
One loan, three structures, every cell a verified run of the tool above at $500,000, 6.5%, 20-year amortisation, 1% fee and monthly payments. The balloon run is the pre-filled example.
| Structure | Payment | Total paid | Total interest | Total cost |
|---|---|---|---|---|
| Balloon at year 5 (plus $427,945.60 balloon) | $3,727.87 | $651,617.54 | $151,617.54 | $656,617.54 |
| Fully amortising, 20 years | $3,727.87 | $894,687.76 | $394,687.76 | $899,687.76 |
| Interest only, 20 years (principal repaid at the end) | $2,708.33 | $1,150,000.00 | $650,000.00 | $1,155,000.00 |
Total interest by structure, same loan and rate:
The balloon row looks cheapest because it stops at year 5: the borrower still owes $427,945.60 on that date and will normally refinance it, at whatever rate the market offers then. Comparing structures on interest alone, without the balance still owed, is the most common mistake in commercial loan shopping.
Balloon loans: the term is not the amortisation
A balloon loan borrows the payment of a long loan and the deadline of a short one. Payments are computed on the 20 or 25 year schedule, but after 5, 7 or 10 years the remaining balance comes due in full.
Lenders structure commercial property debt this way because they do not want to fix a rate for 25 years, and borrowers accept it because the payment stays affordable. The risk sits entirely at the balloon date: if rates have risen, the property has fallen in value or income has dipped, refinancing the $427,945.60 in the example may cost far more than the original loan, or may not be available at all. The OCC’s Commercial Real Estate Lending handbook treats exactly this refinancing exposure as a core risk of commercial property lending. Run the balloon year early and late before you sign: moving the balloon from year 5 to year 7 on the example loan cuts the balance due from $427,945.60 to $391,915.91, a verified run of this tool. For the payment-by-payment view behind the first year, the amortization schedule calculator lays out a full schedule for a standard loan.
Interest only: the cheapest payment, the dearest hold
An interest-only payment is one period of interest on the untouched balance: $2,708.33 a month on the example loan, against $3,727.87 amortising. The principal does not move at all.
That trade suits a bridge loan, a construction phase or a property being repositioned, where cash flow is temporarily thin and a sale or refinance is genuinely close. Held to term it is simply expensive: the example loan pays $650,000 of interest over 20 years and still owes the whole $500,000 at the end. One correction worth knowing about: at a 0% rate this tool now returns a $0.00 interest-only payment and a total paid equal to the principal. An earlier version divided the principal by the number of payments even at 0%, which double-counted the principal in the total; the interest-only definition, payment equals balance times the periodic rate, allows no other answer at zero.
Why the origination fee belongs in the total
A 1% origination fee on $500,000 is $5,000 paid at closing, and it never appears in the payment, which is exactly why rate-only comparisons mislead.
Take two offers on the example loan: 6.25% with a 2% fee, or 6.5% with no fee. The lower rate saves a modest amount of interest each month, while the fee takes $10,000 on day one. Over a 5 year balloon hold the fee-heavy offer can easily cost more in total, and the gap only shows when the fee sits inside the cost figure, as it does here in Total cost. Fees on business loans vary by program: the SBA’s 7(a) loan program publishes its own guaranty fee schedule, and conventional commercial lenders commonly quote origination between 0.5% and 2%. If the borrowing funds a premises upgrade rather than a purchase, compare the structure against a dedicated business improvement loan run as well, and if you would rather rent the premises than own them, the loan vs lease calculator puts the two side by side.
What competing calculators miss
Commercial loan tools tend to specialise in one structure and stop. The gaps below are the reason this page keeps all three structures, the fee and the frequency in a single run:
- MortgageCalculator.org’s balloon calculator: strong on balloon math with both principal-and-interest and interest-only payments, but it is a mortgage page: no origination fee in the total and no quarterly or annual commercial payment frequencies.
- CommercialRealEstate.loans: a polished commercial mortgage tool with a full schedule and an interest-only figure, but the headline answers are payment and balloon only; there is no all-in total cost with the fee added.
- CommercialPropertyLoanCalculator.com: explains term versus amortisation well and adds loan-to-value and debt service coverage, which this page does not compute. Its cost view still stops at interest over the term, with no fee-inclusive total.
- Calculator.me’s commercial loan page: shows the three payment styles side by side, a genuinely useful layout, but presents them as fixed outputs of one input set rather than letting you set a balloon year, a fee and a frequency yourself.
- NerdWallet’s commercial real estate calculator: clear guidance and a downloadable schedule, aimed at borrowers heading for a lender match. The origination fee only enters through an APR entry, so a fee-versus-rate trade-off cannot be isolated.
- The gap this page fills: balloon, interest only and fully amortising runs from one input set, a balloon balance walked payment by payment (never double-counted), the origination fee inside Total cost, three payment frequencies, and a first-year schedule, with no stored rate table pretending to be today’s market.
Frequently asked questions
The standard amortising formula on the loan amount, rate and amortisation term, at your payment frequency. Each payment covers the period’s interest first and the rest reduces the balance.
The remaining loan balance due at the end of a short loan term, after payments computed on a longer amortisation schedule. On the worked example, $427,945.60 comes due after 5 years of payments on a 20-year schedule.
By amortising the loan payment by payment to the balloon date; the remaining balance is the balloon. Total paid then counts each of those payments once, plus the balloon once.
Payments cover interest only; the principal is repaid in full at the end of the IO period or term. The monthly payment is the balance times the monthly rate, $2,708.33 on a $500,000 loan at 6.5%.
Usually 0.5% to 2% of the loan amount, paid at closing. Government-backed programs publish their own fee schedules, so check the program terms alongside any lender quote.
Yes: total cost = total paid + origination fee. Total paid is the payments plus any balloon; total cost adds the fee on top so two offers can be compared honestly.
It shows each payment split into interest and principal and the declining balance: useful for tax and cash-flow planning. This tool shows the first 12 monthly payments; quarterly and annual runs show totals only.
Yes: monthly, quarterly or annual. Less frequent payments mean slightly more interest, because the balance stays higher for longer between payments.
Amortising and balloon payments become the principal divided by the number of payments, and an interest-only payment becomes $0.00, because interest-only means paying the period’s interest and there is none. Total paid on a 0% interest-only loan equals the principal repaid at the end.
No. It is a planning tool; confirm structures with a commercial lender. Balloon and interest-only structures carry refinancing risk that a payment figure alone does not capture.
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References
- U.S. Small Business Administration. 7(a) Loans. Accessed October 22, 2026.
- U.S. Small Business Administration. 504 Loans. Accessed October 22, 2026.
- Board of Governors of the Federal Reserve System. Selected Interest Rates (H.15). Accessed October 22, 2026.
- Office of the Comptroller of the Currency. Commercial Real Estate Lending: Comptroller’s Handbook. Accessed October 22, 2026.
- Internal Revenue Service. Publication 535: Business Expenses (interest expense). Accessed October 22, 2026.
- Consumer Financial Protection Bureau. Small Business Lending Data. Accessed October 22, 2026.
- U.S. Department of the Treasury. Daily Treasury Par Yield Curve Rates. Accessed October 22, 2026.
- Federal Deposit Insurance Corporation. Quarterly Banking Profile. Accessed October 22, 2026.
- U.S. Small Business Administration. SBA Loans: 7(a), 504 and Microloan Programs. Accessed October 22, 2026.
- Board of Governors of the Federal Reserve System. Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS). Accessed October 22, 2026.