Commercial Real Estate Loan Calculator

Calculate commercial property loan payments, DSCR, and cash-on-cash return.

Free commercial real estate calculator.

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Calculator

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Results

Loan Amount
$0.00
Down Payment Amount
$0.00
Monthly Loan Payment
$0.00
Annual Debt Service
$0.00
DSCR (Debt Service Coverage Ratio)
0.00
Annual Cash Flow (After Debt)
$0.00
Cash-on-Cash Return
0.00%

Load the defaults and watch a plausible-looking deal get declined.

A 1,000,000 property, 25 percent down, 7.5 percent interest, a 20-year amortization, and 80,000 of net operating income.

The payment comes back at 6,042 a month, annual debt service at 72,502, and DSCR at 1.10.

Most commercial lenders will not fund that.

The common floor is 1.20 to 1.25, meaning net operating income has to clear the annual loan payments by 20 to 25 percent, not squeak past them.

At 1.10, the building throws off 7,498 of annual cushion.

One vacant suite, one insurance renewal, or one compressor replacement erases the entire year.

DSCR is net operating income divided by annual debt service, and it answers exactly one question: if income dips, does the property still cover its own note?

Residential lending underwrites you.

Commercial lending underwrites the building.

Your credit score matters at the margin, but the ratio in the middle of this calculator is what gets the deal approved or killed.

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Will This Deal Clear the Lender's DSCR Test?

Load the defaults and watch a plausible-looking deal get declined.

A 1,000,000 property, 25 percent down, 7.5 percent interest, a 20-year amortization, and 80,000 of net operating income.

The payment comes back at 6,042 a month, annual debt service at 72,502, and DSCR at 1.10.

Most commercial lenders will not fund that.

The common floor is 1.20 to 1.25, meaning net operating income has to clear the annual loan payments by 20 to 25 percent, not squeak past them.

At 1.10, the building throws off 7,498 of annual cushion.

One vacant suite, one insurance renewal, or one compressor replacement erases the entire year.

DSCR is net operating income divided by annual debt service, and it answers exactly one question: if income dips, does the property still cover its own note?

Residential lending underwrites you.

Commercial lending underwrites the building.

Your credit score matters at the margin, but the ratio in the middle of this calculator is what gets the deal approved or killed.

Worked Example: Three Levers on the Same 1,000,000 Building

The baseline above fails at 1.10.

There are only three inputs that can rescue it, and each one costs something different.

Here is the same property run four ways, holding the price at 1,000,000 and the rate at 7.5 percent.

  • Baseline, 25 percent down over 20 years: payment 6,042 a month, debt service 72,502, DSCR 1.10, cash flow 7,498, cash-on-cash return 3.0 percent. Declined.
  • Stretch the amortization to 25 years, still 25 percent down: payment falls to 5,542, debt service 66,500, DSCR 1.20, cash flow 13,500, cash-on-cash 5.4 percent. Funded, and it cost nothing but interest paid over a longer tail.
  • Raise the down payment to 35 percent, keep the 20-year amortization: payment 5,236, debt service 62,836, DSCR 1.27, cash flow 17,164, cash-on-cash 4.9 percent. Comfortably funded, but you tied up 350,000 instead of 250,000 to get there.
  • Raise net operating income to 100,000 through rent increases or expense cuts, at the original 25 percent down: DSCR 1.38, cash flow 27,498, cash-on-cash 11.0 percent. The only lever that improves every number at once.

Notice what the second and third rows reveal.

Stretching amortization bought a bigger DSCR gain per dollar than a 100,000 larger check did, because it attacks the denominator directly.

When a broker tells you a deal needs more equity, ask about the amortization schedule first.

Positive vs. Negative Leverage: Cap Rate Against Loan Constant

Here is the trap hiding inside the baseline deal, and it is the reason more money down actually raised the return.

The cap rate is 8.0 percent: 80,000 of income on a 1,000,000 price.

The loan constant, which is annual debt service divided by the loan amount, is 9.67 percent: 72,502 on a 750,000 loan.

You are borrowing at 9.67 to buy income that yields 8.0.

Debt is dragging the return down, not levering it up.

The proof is in the calculator.

Pay all cash and you simply earn the cap rate, 8.0 percent.

Put 25 percent down and cash-on-cash collapses to 3.0 percent.

Put 35 percent down and it recovers to 4.9 percent.

Less debt, better return.

That is negative leverage, and nothing on the loan term sheet announces it.

Now flip it.

At 100,000 of net operating income, the cap rate is 10.0 percent, comfortably above the 9.67 percent loan constant, and cash-on-cash jumps to 11.0 percent, beating the all-cash return outright.

That is positive leverage, and it is the only condition under which borrowing makes you richer rather than busier.

Before you negotiate a quarter point on the rate, check the price against the income with the cap rate calculator.

What Belongs in the NOI Field (and What Never Does)

The fastest way to manufacture a fantasy DSCR is to type gross rent into the net operating income field.

Net operating income is rent and other property income minus vacancy, property taxes, insurance, utilities, management, routine maintenance, and reserves.

It excludes four things people routinely fold in by mistake: the loan payment itself (that is the debt service this calculator computes for you), depreciation, income taxes, and capital expenditures like a new roof or HVAC unit.

On the same 1,000,000 building, 130,000 of gross rent at roughly a 38 percent expense ratio leaves 80,000 of net operating income.

Type 130,000 into the field by mistake and DSCR reads 1.79 instead of 1.10, which is the difference between a deal you believe is bulletproof and one the bank declines in a week.

Lenders will not take your word for the number.

They rebuild it from a trailing twelve-month operating statement and a rent roll, apply their own vacancy factor even if the building is full today, and underwrite to their figure rather than yours.

Run this calculator with their assumptions, not the seller's.

Pre-Application Checklist

Work through this before you spend a dollar on an application fee or a third-party appraisal.

  • Rebuild net operating income from the trailing twelve months, not the seller's pro forma, and re-run the calculator with that number.
  • Add a vacancy factor even at full occupancy, then confirm DSCR still clears 1.25 rather than 1.20, so a single move-out does not breach the loan covenant.
  • Compare the cap rate against the loan constant to find out whether your leverage is positive or negative before you decide how much to put down.
  • Stress the interest rate up 1 to 2 points and re-check DSCR, because most commercial loans reprice at the balloon and your exit assumption is a rate assumption.
  • Confirm the amortization period the lender is actually offering, which is often shorter than the one you modeled here.
  • Budget reserves and capital expenditures separately, since neither appears in net operating income and both come out of the cash flow this tool reports.
  • Total the real cash to close, including down payment, loan fees, appraisal, environmental report, and legal, then recompute cash-on-cash against that larger number.

Your Loan Term Is Not Your Amortization

This calculator models a fully amortizing loan, which is a deliberate simplification worth understanding, because most commercial mortgages do not work that way.

A typical commercial loan carries a 5, 7, or 10-year term but amortizes on a 20 or 25-year schedule.

You make the payment this calculator shows, then the entire remaining balance comes due as a balloon at the end of the term.

On the baseline deal, that means writing a check or refinancing roughly 652,000 in year five, at whatever rates and lending conditions happen to exist then.

So read the Loan Term field here as the amortization period, since that is what sets the payment and therefore DSCR.

It is not a promise the loan runs that long.

The refinance risk sits in the gap between the two numbers, and it is the single most common way a cash-flowing commercial property still ends up in trouble.

What This Calculator Does Not Model

The math runs entirely in your browser.

Nothing you type here, including the purchase price or the operating numbers on a deal you have not closed, is transmitted to a server or stored by us.

What the model leaves out matters as much as what it includes.

It assumes a fixed rate for the full amortization period, so it will not capture a floating rate, an interest-only period, or a rate reset at the balloon.

It ignores closing costs, loan origination points, and required reserves, which means your true cash-on-cash return is lower than the figure shown here, sometimes by a full percentage point.

It does not model prepayment penalties, defeasance, yield maintenance, principal paydown, depreciation, or the tax treatment of any of it.

It also assumes net operating income holds flat, when in reality it moves with rent rolls, renewals, and expense inflation.

Use this to screen deals and to know whether a property is worth a lender conversation at all.

It is an estimate based on the numbers you enter, not an underwriting decision or a loan offer.

Before signing anything, confirm the terms with your lender and consult a commercial mortgage broker, a CPA, and a real estate attorney.

Frequently Asked Questions

Common questions about the Commercial Real Estate Loan Calculator

Most lenders require a minimum DSCR of 1.20 to 1.25. Strong deals land at 1.35 to 1.50. Below 1.0 the property does not cover its own debt payments and you fund the shortfall from your pocket. Aim to clear the lender's floor with room to spare, because they will underwrite with their own vacancy assumption, not yours.
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Sources & References

Commercial Lending Rates and Terms

Commercial real estate loan terms from banks, commercial lenders, and SBA programs. Rates vary by property type, location, borrower experience, and market conditions. Office and retail face higher rates than multifamily or industrial due to market challenges. DSCR requirements range from 1.15x to 1.50x depending on property type and lender.

CRE Loan Calculations

Standard amortization calculations with monthly compounding. DSCR equals annual NOI divided by annual debt service (principal + interest). Calculations show payment amounts and DSCR ratios. Does not include property operating expenses, vacancy reserves, capital improvement budgets, or property-specific risk factors lenders evaluate.

Commercial Lending Complexity

CRE loans require comprehensive property analysis, environmental studies, appraisals, and financial documentation. Lenders require experienced borrowers or property management for complex properties. Balloon payments create refinancing risk. Vacancy, tenant credit, lease terms, property condition, and market trends significantly affect lender decisions beyond simple DSCR calculations. Seek experienced commercial real estate attorney and CPA guidance.

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