Commercial Property Loan Calculator: Repayments, LVR and Interest-Only
Also called: commercial loan calculator, commercial mortgage calculator.
Quick answer
This commercial property loan calculator estimates the repayment on a commercial property loan, principal and interest or interest-only, plus the loan to value ratio and how many times the rent covers the interest. It is a planning estimate, not a quote or an approval.
See the repayment, the LVR and the rent cover.
The loan fills the building up to your loan to value ratio. The dashed lines show where the bank and non-bank lanes usually stop, as an indicative guide rather than lender policy.
The dashed lines are indicative lanes from our commercial property notes, not lender policy: bank maximums cluster around 70 per cent, non-bank reaches 80 per cent in select postcodes, and lease doc and low doc sit around 65 to 75 per cent.
Example rate as at 27 September 2026, not an offer. Change it to the rate you have been quoted.
Rent cover (ICR) is net rent ÷ a year's interest; our notes show lenders commonly testing about 1.1x to 1.3x. Set it to 0 for a property your business will occupy.
The step-up is the principal and interest repayment over the years left in the term once interest-only ends.
- Est. monthly (P and I)
- $6,324.56
- Total interest
- $1,022,368
- LVR
- 70%
- Rent cover (ICR)
- 1.42x
$6,324.56 a month over 25 years on a loan of $875,000, principal and interest, at the 7.25 per cent example rate. LVR 70 per cent, rent cover 1.42x, total interest about $1,022,368.
Estimates only. This calculator is not a quote, an offer or an approval. The result depends on the figures you enter and the example rate shown; the lender's assessment decides the actual rate, term and repayment. Nick Lim is an FBAA Accredited Finance Broker with Switchboard Finance.
Your figures come with you into the enquiry; nothing reaches us until you send it.
No obligation · We respond same day
How are commercial property loan repayments calculated?
A principal and interest repayment is the loan amount amortised over the term at the interest rate and paid in arrears; an interest-only repayment is just the interest, the loan times the annual rate divided by twelve.
Monthly P and I repayment = loan × r ÷ (1 − (1 + r)−n), where r is the annual rate ÷ 12 and n is the number of months. Interest-only monthly = loan × annual rate ÷ 12.
This is the standard amortisation formula set out in the Reserve Bank of Australia's Research Discussion Paper 2021-10, Appendix A. The calculator assumes:
- Repayments are made in arrears, at the end of each month.
- Monthly is the base figure; weekly is the monthly repayment × 12 ÷ 52 and fortnightly × 12 ÷ 26.
- The rate you enter holds for the whole term; a real variable rate moves.
- After an interest-only period the full loan is repaid principal and interest over the years left in the term.
- LVR is the loan divided by the value you enter; the lender measures it against its own valuation.
- Rent cover is the annual net rent divided by a year's interest on the full loan at the rate entered.
- Fees, stamp duty, GST on the purchase and land tax are not included.
How the loan itself is arranged, from full doc to lease doc, is covered on our commercial property loans page.
Which rate should you enter?
Enter the rate you have been quoted; the 7.25 per cent example rate is a planning figure as at 27 September 2026, not an offer. Commercial property rates move with the LVR, the documentation path, the lease and the type of lender, which the commercial property loan rates guide explains.
What are the repayments on a $500,000, $1,000,000 or $2,000,000 commercial property loan?
About $7,228 a month on $1,000,000 over 25 years principal and interest at the 7.25 per cent example rate, or about $6,042 a month interest-only. The table shows all three amounts on interest-only and on 20 and 25 year principal and interest terms.
| Loan amount | Interest-only, monthly | 25 years P and I, monthly | 20 years P and I, monthly | Total interest, 25 years P and I |
|---|---|---|---|---|
| $500,000 | $3,021 | $3,614 | $3,952 | $584,210 |
| $1,000,000 | $6,042 | $7,228 | $7,904 | $1,168,421 |
| $2,000,000 | $12,083 | $14,456 | $15,808 | $2,336,841 |
Sources: formula from RBA Research Discussion Paper 2021-10, Appendix A (rba.gov.au, November 2021, read 27 September 2026). The 7.25 per cent example rate is an indicative practitioner figure as at 27 September 2026, not a quote. Monthly repayments in arrears, rounded to the dollar; interest-only is the loan × 7.25 per cent ÷ 12 and does not reduce the loan.
The 20 year column is also the repayment after five years of interest-only on a 25 year loan, because the whole loan is then repaid over the 20 years left: on $1,000,000 that is a step from about $6,042 to about $7,904 a month. For what a rate move does to these figures, see how a rate change flows into your repayment.
How much can I borrow for a commercial property?
Usually the smaller of two limits: the loan to value ratio the lender allows on the property, and the loan the net rent can carry at the lender's interest cover test.
What LVR do lenders allow?
It depends on the type of lender, the documentation and the property, and the lanes in the calculator are indicative, not lender policy. Bank maximums on commercial property commonly cluster around 70 per cent of the assessed value, with some owner-occupied full doc files reaching 80; non-bank maximums reach 80 per cent only in select metro postcodes and loan sizes; lease doc and low doc ceilings commonly land around 65 to 75 per cent; and private lenders sit lower again, around 60 per cent on commercial security. The deposit is the gap: at 70 per cent LVR you fund 30 per cent of the price plus costs, which the guide to how commercial property loans work sets out alongside what lenders assess.
How does rent cover limit the loan?
Rent cover, or interest cover, is net rent divided by a year's interest, and because interest grows with the loan while the rent does not, it tightens as the LVR rises. On the default $1,250,000 property with $90,000 net rent at 7.25 per cent, 70 per cent LVR gives $875,000 and a 1.3x cover test allows about $954,900, so the LVR is the limit. At 80 per cent, $1,000,000, cover falls to about 1.24x, which is why interest cover is the real gate at 80 per cent LVR. Where the business occupies the property, lenders test its income instead, often as debt service cover; the business borrowing power calculator models that side.
What happens when interest-only ends?
The repayment steps up, because the whole loan must then be repaid principal and interest over the years left in the term. On the default $875,000 over 25 years at 7.25 per cent, five years of interest-only at about $5,286 a month steps up to about $6,916 a month for the remaining 20 years, against about $6,325 had it been principal and interest from the start, and total interest rises from about $1,022,368 to about $1,101,977.
Whether a lender offers interest-only on commercial property, and for how long, varies by lender and file; what non-bank lenders currently accept is set out in our non-bank lender policy matrix.
What else do borrowers ask about commercial property repayments?
How much can I borrow for a commercial property?
Usually the smaller of what the lender's LVR allows on the property and what the net rent can carry at its interest cover test. As indicative lanes rather than lender policy, bank maximums commonly cluster around 70 per cent of the value and non-bank maximums reach 80 per cent in select postcodes; the calculator shows your LVR and rent cover side by side.
What is the monthly repayment on a $1,000,000 commercial property loan?
About $7,228 a month over 25 years principal and interest at the 7.25 per cent example rate, or about $6,042 a month interest-only. Change the rate and term in the calculator to match your quote.
Should I choose interest-only or principal and interest?
Interest-only lowers the repayment now but does not reduce the loan, so the repayment steps up when the period ends and total interest is higher over the same term; principal and interest costs more each month and repays the loan as you go. The calculator shows the interest-only figure, the step-up and the total interest for both.
What LVR will a lender give on commercial property?
It depends on the lender, the documentation and the property; as indicative lanes, bank maximums commonly cluster around 70 per cent, non-bank maximums reach 80 per cent in select metro postcodes, and lease doc and low doc ceilings sit around 65 to 75 per cent. The lender's own valuation sets the value the LVR is measured against.
Is this an approval?
No, it is an estimate from the figures you enter and an example rate; a lender's valuation and assessment decide the actual LVR, rate and repayment. Send your figures through the enquiry form if you want them checked against live lender policy.