Commercial Mortgage Affordability Calculator

If this monthly payment estimate fits your cash flow projections, you are ready to move toward a formal loan application. Keep in mind that this figure is an estimate; your actual rate depends heavily on your credit profile, the property's operating history, and loan structure—whether you pursue non-recourse commercial loans or recourse financing.

What changes your rate and answer

• Debt Service Coverage Ratio (DSCR): Lenders typically require 1.20x to 1.35x. If your NOI doesn't support the loan at this ratio, lower your loan amount or increase NOI through repositioning. A property that fails the DSCR test will not clear underwriting, regardless of your personal credit.
• Loan-to-Value (LTV) Ratio: Lower LTV—meaning more equity down—translates to better pricing. A 65% LTV often secures a lower rate than 75% LTV on the same property, since the lender's loss position improves.
• Credit Score and Track Record: Developers and operators with 720+ credit and a track record of successful closings access tighter spreads. For structured credit or bridge loan scenarios, lender appetite for your profile directly affects rate and terms.
• Asset Class and Market: Multifamily property financing in 2026 generally carries more favorable rates than office or hospitality, reflecting lower perceived default risk. Supply/demand in your submarket also influences rate.
• Rate Environment: Commercial real estate interest rates 2026 reflect Fed policy and secondary market dynamics. A 50-basis-point move in the broader rate environment can shift your quote by 0.5–0.75%.

How to use this

• Loan Amount: Enter total debt, not purchase price. If you are buying a $5M property with $1.5M down, input $3.5M.
• Interest Rate (APR): Use the rate your lender quoted or compare agency multifamily financing against bridge options to understand your rate menu.
• Amortization Term: Most commercial loans amortize over 20–25 years, even if the note matures in 5–10 years via balloon. Enter the amortization schedule, not the loan term.
• Net Operating Income (NOI): Calculate as effective gross income minus all operating expenses, excluding debt service. Use trailing 12-month or YTD actuals; underwriters will challenge projections on unstabilized assets.
• Target DSCR: Enter your lender's required minimum (1.25x is standard for owner-occupied; 1.35x–1.50x for non-recourse or bridge). If the calculator flags "DSCR Fail," your debt is too high for the NOI.

How lenders price commercial mortgage rates

Commercial real estate loans are not commodities. Two lenders quoting the same property can differ by 75–150 basis points depending on their risk appetite, cost of capital, and your profile. Portfolio lenders and private lenders price differently than agency sources. Hard money commercial loans carry a premium but close faster. Multifamily lenders operate on tighter spreads than construction lenders because the cash-flow risk is lower once stabilized. If your quote seems high, test rate sensitivity here—a 0.5% move in APR changes your monthly payment by several thousand dollars on a $2.5M loan.

DSCR interpretation

If your DSCR is 1.40, your NOI covers debt service 1.4 times—meaning you have a 40% cushion before cash flow goes negative. Lenders use DSCR to assess default risk. A ratio below 1.20x is considered stressed; most commercial mortgage lenders will not approve loans below 1.20x, even with strong equity or sponsor credit. If your property is underperforming, you have three paths: (1) raise NOI through operations, (2) lower debt, or (3) pursue a bridge or mezzanine structure that accepts lower DSCR for a shorter, higher-priced facility.

Bottom line

This calculator is a pre-qualification tool. Use it to validate whether your pro forma supports your debt target before calling lenders. If the calculator returns a passing DSCR and a payment you can live with, you are ready to run a rate competition and request a soft pull. If you miss the DSCR hurdle, adjust your assumptions or equity before approaching the market.