Refinance Home Calculator

function calculateCommercialLoan() { var propertyValue = parseFloat(document.getElementById('propertyValue').value); var downPayment = parseFloat(document.getElementById('downPayment').value); var annualRate = parseFloat(document.getElementById('interestRate').value); var years = parseFloat(document.getElementById('loanTerm').value); if (isNaN(propertyValue) || isNaN(downPayment) || isNaN(annualRate) || isNaN(years) || propertyValue <= 0) { alert('Please enter valid positive numbers.'); return; } var principal = propertyValue – downPayment; if (principal <= 0) { alert('Down payment cannot exceed property value.'); return; } var monthlyRate = (annualRate / 100) / 12; var numberOfPayments = years * 12; var monthlyPayment = (principal * monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1); var totalRepayment = monthlyPayment * numberOfPayments; var totalInterest = totalRepayment – principal; var ltv = (principal / propertyValue) * 100; document.getElementById('resLoanAmount').innerText = '$' + principal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ' (' + ltv.toFixed(1) + '% LTV)'; document.getElementById('resMonthlyPayment').innerText = '$' + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resTotalInterest').innerText = '$' + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resTotalRepayment').innerText = '$' + totalRepayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('results').style.display = 'block'; }

Understanding Your Commercial Mortgage

A commercial mortgage is a debt-based financial instrument secured by a lien on commercial real estate rather than residential property. This tool helps business owners and real estate investors calculate the monthly principal and interest payments for properties such as offices, retail spaces, warehouses, or multi-family units.

Key Components of Commercial Loan Calculations

• Loan-to-Value (LTV) Ratio: Most commercial lenders require an LTV between 65% and 80%. A higher down payment reduces lender risk and may secure a better interest rate.
• Amortization vs. Term: In commercial lending, the amortization period (e.g., 25 years) is often longer than the actual loan term (e.g., 5-10 years), which typically results in a "balloon payment" at the end of the term.
• Interest Rates: Commercial rates are usually higher than residential rates because commercial properties represent higher risk for lenders.

Real-World Example Calculation

Imagine you are purchasing a warehouse for $1,200,000. You have a down payment of $300,000 (25%). The bank offers a 6.0% interest rate with a 20-year amortization.

Using the calculator:

1. Loan Amount: $900,000
2. Monthly Payment: $6,447.93
3. Total Interest Paid: $647,503.20
4. Total Loan Cost: $1,547,503.20

Why Use a Commercial Mortgage Calculator?

Calculating commercial debt is more complex than residential debt due to the impact of origination fees, closing costs, and varying debt-service coverage ratios (DSCR). By using this tool, you can quickly evaluate the cash flow requirements of a property to ensure the rental income or business revenue can comfortably cover the monthly mortgage obligations.

Disclaimer: This calculator provides estimates for principal and interest only. It does not include property taxes, insurance, or maintenance costs. Consult with a financial advisor for a full pro-forma analysis.