Commercial Property Loan Calculator, 2025 Edition
Estimate monthly payments, interest, and affordability for your commercial real estate investment
Use this Commercial Property Loan Calculator to estimate monthly payments and total loan costs for your office, retail, or industrial investment. Factor in interest rates, amortization schedules, and property expenses to make data-driven decisions before applying for financing.
Property Details
Understanding Commercial Property Loans
A commercial property loan is financing specifically designed for business real estate purchases. Unlike residential loans, commercial loans focus on the property's income potential and the borrower's business credentials.
Key Differences:
- Shorter terms (5-20 years vs 30 years residential)
- Higher down payments (20-30% typical)
- Focus on DSCR rather than personal DTI
- Property income drives approval decisions
The Debt Service Coverage Ratio (DSCR) is the most critical metric for commercial loan approval. It measures your property's ability to cover debt payments.
DSCR = Net Operating Income / Annual Debt ServiceDSCR Requirements:
- 1.5+: Excellent terms, best rates
- 1.25-1.5: Standard approval
- 1.0-1.25: May require additional collateral
- <1.0: Typically not approved
Commercial loan terms vary by property type and lender. Here are current market ranges:
| Property Type | Interest Rate | Term | LTV |
|---|---|---|---|
| Office | 6.5-8.5% | 10-20 yrs | 60-75% |
| Retail | 7.0-9.0% | 10-15 yrs | 55-70% |
| Industrial | 6.0-8.0% | 15-25 yrs | 65-80% |
| Mixed-use | 6.5-8.5% | 15-20 yrs | 60-75% |
Many commercial loans feature balloon payments - large lump sums due at the end of the loan term. This requires careful planning for refinancing or sale.
Key Considerations:
- Plan your exit strategy upfront
- Monitor property value appreciation
- Build relationships with lenders early
- Consider refinancing 6-12 months before due date
- Have backup financing options ready
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