Commercial Mortgage Calculator
Find the monthly payment on a loan for a commercial building, and the balance still owed when a balloon loan's term ends. Enter the loan, the rate, the years the payments are spread over and the term.
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How it works
The monthly payment is spread over the amortization years, as if the loan ran that long. It uses the standard loan formula with the yearly rate divided by 12.
At the end of the term, the balance still owed is due in one lump sum, called the balloon. Total paid is every payment made over the term. Interest is that total less the part of the loan that was repaid.
Worked example
A loan of $1,000,000.00 at 6.5% a year, paid over 25 years, is $6,752.07 a month. After a 10 year term, a balloon of $775,113.59 is due. Over the term you pay $810,248.59 in total, of which $585,362.19 is interest.
Questions
What is a balloon payment?
It is a large lump sum due at the end of a shorter loan term. The monthly payments follow a longer schedule, so a balance is still owed when the term ends.
Should the term be shorter than the amortization?
Keep the term at or below the amortization years, which is how these loans are usually set up. A longer term is not handled correctly here.
Are fees or insurance included?
No. Lender fees, closing costs, insurance and property taxes are not included. Ask the lender for a full written estimate.
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