Loading...
Calculate principal and interest payments for commercial mortgages. Includes origination fees and closing cost analysis.
M = P[r(1+r)^n]/[(1+r)^n-1]
A commercial mortgage finances the purchase of income-producing real estate. Unlike residential mortgages, commercial loans are underwritten based on the property's income rather than the borrower's personal income. The lender evaluates the net operating income, DSCR, and loan-to-value ratio to determine the maximum loan amount and rate.
For triple net properties, the mortgage payment is the primary expense the investor bears after collecting rent. Since the tenant covers taxes, insurance, and maintenance, the monthly cash flow is effectively the NNN rent minus the mortgage payment minus any asset management costs.
Budget 2-5% of the loan amount for closing costs. Typical fees include origination (0.5-1.5%), appraisal ($3,000-$8,000), environmental report ($2,000-$5,000), legal ($3,000-$10,000), title insurance, and survey costs. These are upfront costs that affect your total cash investment and initial cash-on-cash return.
Compare against the loan payment calculator for a simpler payment-only calculation, or use the refinance analysis tool to model a refi scenario.
Most commercial lenders require a minimum credit score of 660-680 for the guarantor. However, commercial loans are primarily underwritten on the property's income, not personal credit. A strong DSCR and low LTV can offset a lower credit score.
SBA 504 loans offer terms up to 25 years. Most conventional commercial mortgages have 5-10 year terms with a 20-30 year amortization schedule and a balloon payment at maturity. Life company loans may offer 10-15 year terms for credit-tenant NNN properties.
Commercial mortgage rates in early 2026 range from approximately 5.5% to 8.0% depending on loan type, property quality, and borrower strength. NNN properties with investment-grade tenants typically qualify for rates at the lower end of this range.