Commercial loan calculator.

Method and limitations

Formulas: monthly rate i = (1 + r/m)^m/12 − 1. During the interest-only months the payment is P × i. Afterwards the payment over n months that leaves a balloon B is (P − B(1 + i)⁻ⁿ) × i / (1 − (1 + i)⁻ⁿ). Total interest is everything paid, including the balloon, minus the amount borrowed.

Worked example: $400,000.00 at 8% compounded monthly, 12 interest-only months of $2,666.67, then 60 payments of $6,749.58, and a $100,000.00 balloon at month 72. Total paid is $536,975.10, of which $136,975.10 is interest.

Rate statement: section 4 of the Interest Act limits interest to 5% a year on a written contract that sets the rate per day, week, month or other period under a year, unless the contract also states the equivalent yearly rate. Check that your agreement shows an annual rate.

What this is not: lenders can compound or charge interest on a daily basis, add fees, or reset the rate during the loan. This is a monthly model on the numbers you type in.

FAQ

How do I calculate a commercial loan with an interest-only period?

Pay interest only (balance times the monthly rate) for the first months, then amortize the balance over the remaining months. In the example, $2,666.67 a month for 12 months, then $6,749.58.

What is a balloon payment?

A lump sum due at the end because the regular payments did not repay the whole balance. Here it is $100,000.00.

Does an interest-only period cost more in total?

Usually yes, because the balance is not reduced during it. The BDC loan calculator page compares the same loan with and without that period.

What if my loan has no balloon?

Enter 0 and the payments fully repay the loan by the last month.

Is this the same as a commercial mortgage calculator?

This one has no property inputs. For a mortgage with a term shorter than the amortization, debt service coverage and loan-to-value, use the commercial mortgage calculator.

Sources

• Interest Act, section 4 (Justice Laws Website), retrieved October 2026