Commercial Mortgage Calculator: Payment and Balloon
A commercial mortgage calculator estimates regular payments and the remaining balance due when a loan matures. Enter the loan amount, rate, amortization period and maturity term separately. A payment based on twenty-five years of amortization does not mean you have twenty-five years before the lender requires the outstanding principal to be repaid.
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Report a calculation issue Commercial Mortgage Calculator: Payment and Balloon: purpose and method
A commercial mortgage calculator estimates regular payments and the remaining balance due when a loan matures. Enter the loan amount, rate, amortization period and maturity term separately. A payment based on twenty-five years of amortization does not mean you have twenty-five years before the lender requires the outstanding principal to be repaid.
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Method and test recordFormula v1.0.1
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- 3 configured scenarios
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- 3 shown below
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2026-10-28 - Created from finished package copy and deterministic contract.
Reference inputs and expected results
Up to 12 examples from the configured definition fixtures are shown. Expected values use the stated output units; invalid inputs are intended to be rejected.
| Case | Inputs | Expected result |
|---|---|---|
| Five-year maturity with 25-year amortization | Principal: 1000000; Rate: 7; Amortization Months: 300; Maturity Months: 60; Io Months: 0; Annual Noi: 110000 | Payment: 7067.7919727509; Regular Payments: 424067.51836506; Interest To Maturity: 335689.04240457; Balloon After Last Payment: 911621.52403951; Total Due On Maturity Date: 918689.31601227; Regular Annual Debt Service: 84813.503673011; Dscr: 1.296963281 (allowed numeric tolerance: 1.0E-6) |
| Zero-rate shorter maturity | Principal: 120000; Rate: 0; Amortization Months: 120; Maturity Months: 36 | Payment: 1000; Regular Payments: 36000; Interest: 0; Balloon: 84000; Maturity Day Due: 85000; Total Outflow Including Balloon: 120000 (allowed numeric tolerance: 1.0E-6) |
| Entire term interest only | Principal: 1000000; Rate: 6; Io Months: 60; Maturity Months: 60 | Monthly Interest Payment: 5000; Interest Total: 300000; Balloon: 1000000; Maturity Day Due: 1005000 (allowed numeric tolerance: 1.0E-6) |
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Amortization and maturity are different
The amortization period determines the scheduled payment needed to gradually repay principal. The maturity term determines when the agreement ends. If maturity arrives before full amortization, the unpaid balance is commonly called a balloon.
Commercial calculator pages from HARBORWEST and Capital Market Funds distinguish these inputs and include interest-only modeling. Your agreement controls the actual schedule and accrual convention; their example terms are not universal rules.
This tool uses a stated fixed note rate and equal monthly periods. It can also model an explicitly selected interest-only phase. It does not forecast a future refinance, property sale or loan extension to fund the balloon.
Enter the loan structure before the property ratios
Enter gross loan principal, annual note rate, amortization months and maturity months. Add any financed fees to principal and identify cash-paid charges separately. If the agreement starts with interest-only payments, enter that phase and specify how the remaining balance is amortized afterward.
Keep principal and interest separate from tax, insurance, reserve deposits and operating expenses. They affect the property budget, but they are not all part of the contractual P&I payment.
If you use the optional DSCR view, enter annual NOI and its accounting definition. The commercial view divides that income by annual debt service. It should not be mixed with a residential rental ratio that places gross rent over PITIA. For the latter, use the Rental Property DSCR Loan Calculator.
How the monthly schedule works
For an amortizing phase, the payment is calculated from principal, the monthly note rate and the remaining amortization months. Every scheduled payment covers that month's interest and reduces principal by the remainder.
The model stops at maturity and shows the balance left after the final scheduled regular payment. It also shows the total amount due on that date: the regular payment plus that remaining balance. Keeping the two labels distinct avoids counting the last installment twice.
In a fully interest-only structure with no principal reductions, each monthly interest payment is principal multiplied by the annual rate divided by 12. The original principal remains due at maturity. A smaller periodic payment has not eliminated that obligation.
Worked example: a large balloon remains
Assume a $1,000,000 loan at a fixed 7% note rate, amortized over 25 years but maturing after five years. These are illustrative assumptions; no lender offer is implied.
The modeled monthly payment is $7,067.79. Across sixty scheduled payments, total P&I is $424,067.52. Of that amount, approximately $335,689.04 is interest and $88,378.48 reduces principal.
Immediately after the sixtieth regular payment, the remaining balance is approximately $911,621.52. That is the balloon balance. If the sixtieth regular payment and balloon are paid together on maturity, the combined amount is $918,689.32.
At illustrative annual NOI of $110,000, regular annual debt service is $84,813.50 and recurring-payment DSCR is approximately 1.297. That ratio excludes the one-time balloon from the ordinary annual denominator. It therefore does not demonstrate that the property can pay the maturity obligation from that year's operations.
Plan for maturity instead of assuming a refinance
Consider how the balloon would be paid if refinancing is unavailable or more expensive. A change in rates, appraisal, property occupancy or lender requirements could affect an exit plan. The calculator does not assign a probability to those outcomes.
Use the Rental Property Cash Flow Calculator to examine the operating budget separately. Review reserve needs, capital expenditure and vacancy rather than treating debt-service coverage as a complete investment assessment.
Prepayment charges, yield maintenance, defeasance and extension options depend on the agreement. This calculator does not invent a settlement amount from the remaining principal. Obtain a dated quote if you plan to repay before maturity.
Frequently asked questions
Is the balloon included in total repayment?
The result should show regular payments, balloon and their combined total separately. A total that includes the balloon must not add the final regular installment twice.
What if the maturity term equals amortization?
A standard fully amortizing fixed-payment loan reaches approximately zero balance after the final adjusted payment. The balloon should be zero, apart from an explicitly stated different contract feature.
Does interest-only borrowing cost less?
It reduces scheduled principal repayment during the interest-only period. That can lower the current payment while leaving more debt outstanding and potentially more interest over time. Compare the full schedule and maturity balance.
Can this match actual/360 interest exactly?
Not in the default equal-month model. Actual/360, actual/365, irregular first periods and daily timing require the applicable dated schedule. Confirm the contract basis before using the estimate for payment reconciliation.
Does the calculator supply a current commercial mortgage rate?
No. Commercial pricing can depend on the property, borrower, lender, term, amortization, recourse, leverage and market conditions. Enter the note rate from a dated financing proposal and test a higher-rate scenario rather than treating an example rate as a current quote.
Does a DSCR result guarantee financing?
No. The optional ratio reflects entered NOI and debt service only. Lenders may use different adjustments and additional requirements.
Enter the maturity term separately from amortization, then review the regular payment and balloon together before evaluating the financing plan.