Commercial Mortgage Calculator
Estimate commercial repayments, the balance due at expiry and income coverage.
Your commercial loan
Enter the proposed facility terms. Results update as you type.
Your commercial repayments
Example inputsCheck the fields marked with an error. Repayments are unavailable until the inputs are valid.
- $8,055.93
- Per selected payment period, after any interest-only period. The expiry balance is payable separately.
- $869,021
- $352,377
- Not selected
- 1.24 times
- Annual net income divided by the highest annualised regular payment. Excludes the expiry balance.
Compare regular repayments
Each structure uses the same loan, rate, contract term and payment frequency. Availability depends on the lender.
| Regular payments over the term | $483,356 |
|---|---|
| Regular payments plus expiry balance | $1,352,377 |
| Highest annualised regular payments | $96,671 |
Commercial Repayments and Amortisation
A commercial mortgage repayment depends on the amount borrowed, interest rate and repayment structure. The contract term is when the facility expires. The amortisation period is the horizon used to calculate principal-and-interest payments.
A five-year contract can use repayments calculated over 20 years. Because those payments do not repay the loan within five years, the remaining balance becomes due at expiry. Refinancing that balance requires a new lending decision.
This commercial property mortgage calculator treats the amortisation period as the total horizon from settlement. Any interest-only years use part of that horizon. Principal-and-interest repayments then use the remaining years.
The calculation follows the Reserve Bank of Australia's loan amortisation recurrence. It divides the nominal annual rate by the payment frequency. Actual facilities can calculate interest daily or use different billing periods.
| Input or result | Amount or period |
|---|---|
| Loan amount | $1,000,000 |
| Interest rate | 7.5% |
| Contract term | 5 years |
| Amortisation period | 20 years |
| Monthly repayment | $8,055.93 |
| Balance due at expiry | $869,021 |
| Interest over five years | $352,377 |
The example has no interest-only period or fees. The export includes annual regular payments and the reducing balance. The final balance is payable in addition to the final regular payment.
Interest-Only and Balloon Options
Interest-only payments cover interest while leaving the original principal outstanding. A target balloon reduces the principal repaid through regular instalments and leaves the entered amount due at expiry.
Select Amortisation to derive the expiry balance from a repayment horizon. Select Target balloon to set that balance directly. The tool then calculates payments over the contract term remaining after any interest-only period.
At the example $1,000,000 loan and 7.5% rate, interest-only payments are $6,250 a month. Five years of interest-only payments total $375,000, with $1,000,000 still due. Principal-and-interest payments based on 20 years are $8,055.93 a month, leaving $869,021 after five years.
The chart also shows the payment needed to repay the whole loan within the selected contract term. These are mathematical comparisons on the same principal. They do not imply a lender offers every structure.
For example, National Australia Bank's Business Markets Loan describes interest-only and principal repayment options. Its interest is calculated daily, so this equal-period estimate does not reproduce its account statements.
Income Available for Debt Service
Debt-service coverage is annual net income divided by annual regular debt payments. Enter property income after operating costs, or business cash flow available for this loan. Use the same income basis throughout a comparison.
This tool uses the higher annualised payment stage when the loan starts interest only and later converts to principal and interest. The coverage ratio excludes the expiry balance. Arrange funds for that balance separately.
At the starting inputs, $120,000 net annual income divided by $96,671 in annual regular payments gives coverage of 1.24 times. Income equals regular payments at 1 time. Below 1 time, the entered income does not cover those payments.
The ratio is a cash-flow comparison, not a lender's approval threshold. It excludes other debts unless you allow for them in the income figure. Clear the income field to omit the ratio. A zero-rate, full interest-only scenario has no regular payments, so its ratio is not calculated.
Costs Beyond the Repayment
The calculator excludes establishment and ongoing product fees. Add any financed costs to the loan amount before calculating. Budget separately for valuation, legal work and property due diligence.
Purchase costs can also include transfer duty, registration and goods and services tax, depending on the transaction. Property cash flow must allow for insurance, repairs, management charges, unrecovered outgoings and vacancy.
Early repayment or a fixed-rate break can create another cost. Keep those amounts separate from the interest total shown here. For a broader assessment, review commercial property lending considerations alongside the proposed facility terms.