Bridge Loan Calculator

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Commercial Loan Calculator

Analyze monthly payments, balloon payments, and total debt service costs.

The period used to calculate the monthly payment.
When the full balance is due (Balloon Payment).

Summary

Monthly Payment: $0.00
Balloon Payment (at year 10): $0.00
Upfront Fees: $0.00
Total Interest Paid: $0.00
Total Cost of Credit: $0.00

Understanding Commercial Loan Structures

Commercial loans differ significantly from residential mortgages. While a home loan is typically amortized over 30 years and paid off in full by the end, commercial real estate (CRE) loans often feature a balloon payment structure. This means the monthly payment is calculated as if the loan lasts 25 or 30 years (the amortization period), but the actual loan must be paid back or refinanced much sooner—typically in 5, 7, or 10 years.

Key Commercial Lending Terms

  • Amortization Period: The schedule used to calculate your monthly principal and interest. A longer amortization results in lower monthly payments but higher total interest.
  • Loan Term: The actual duration of the legal agreement. If the term is shorter than the amortization, the remaining balance is due at the end (the Balloon Payment).
  • DSCR (Debt Service Coverage Ratio): Lenders use this to ensure the property generates enough income to cover the debt. Usually, a DSCR of 1.2x or higher is required.
  • Origination Fees: Upfront costs charged by the lender for processing the loan, typically ranging from 0.5% to 2% of the total loan amount.

Example Calculation

If you take out a $1,000,000 commercial loan at a 7% interest rate with a 25-year amortization and a 10-year term:

  1. Your monthly payment would be approximately $7,067.79.
  2. After 10 years of payments, you would still owe a balance of roughly $787,000.
  3. This $787,000 is the "Balloon Payment" that you must either pay in cash or refinance into a new loan.
Pro Tip: Always factor in "closing costs" and "prepayment penalties." Commercial loans often include "Yield Maintenance" or "Defeasance" clauses that make it expensive to pay off the loan early.
function calculateCommercialLoan() { // Inputs var principal = parseFloat(document.getElementById('loanAmount').value); var annualRate = parseFloat(document.getElementById('interestRate').value); var amortYears = parseFloat(document.getElementById('amortPeriod').value); var termYears = parseFloat(document.getElementById('loanTerm').value); var feePercent = parseFloat(document.getElementById('originationFee').value); // Validation if (isNaN(principal) || isNaN(annualRate) || isNaN(amortYears) || isNaN(termYears) || principal <= 0) { alert("Please enter valid positive numbers for all fields."); return; } // Monthly Math var monthlyRate = (annualRate / 100) / 12; var totalAmortMonths = amortYears * 12; var totalTermMonths = termYears * 12; // Monthly Payment Calculation var monthlyPayment = 0; if (monthlyRate === 0) { monthlyPayment = principal / totalAmortMonths; } else { monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, totalAmortMonths)) / (Math.pow(1 + monthlyRate, totalAmortMonths) – 1); } // Balloon Payment Calculation (Remaining Balance after Term) // Formula: B = P[(1+r)^n – (1+r)^p] / [(1+r)^n – 1] // n = total amort months, p = months paid (term) var balloonAmount = 0; if (termYears < amortYears) { balloonAmount = principal * (Math.pow(1 + monthlyRate, totalAmortMonths) – Math.pow(1 + monthlyRate, totalTermMonths)) / (Math.pow(1 + monthlyRate, totalAmortMonths) – 1); } else { balloonAmount = 0; } // Upfront Fees var fees = principal * (feePercent / 100); // Total Interest during Term var totalPaidDuringTerm = monthlyPayment * totalTermMonths; var principalPaidDuringTerm = principal – balloonAmount; var totalInterest = totalPaidDuringTerm – principalPaidDuringTerm; // Total Cost var totalCost = totalInterest + fees; // Display Results document.getElementById('monthlyPaymentDisplay').innerHTML = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('balloonPaymentDisplay').innerHTML = "$" + balloonAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('balloonYearLabel').innerHTML = termYears; document.getElementById('feesDisplay').innerHTML = "$" + fees.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalInterestDisplay').innerHTML = "$" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalCostDisplay').innerHTML = "$" + totalCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); } // Initial calculation calculateCommercialLoan();

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