How to use the commercial loan calculator
- Property price — the purchase price, or the current value if you're refinancing.
- Deposit or equity — the cash or equity you're putting in. The calculator turns this into a loan amount and an LVR.
- Interest rate — pre-filled with an example rate. Change it to a rate you've been quoted to compare offers.
- Loan term and repayment type — pick principal & interest, interest-only, or an interest-only period followed by principal & interest.
- Frequency — monthly, fortnightly or weekly repayments.
Results update as you type. Open the yearly schedule to see how much of each year's repayments goes to interest and how fast the balance falls.
How commercial loan repayments are calculated
A principal & interest commercial loan is repaid in level instalments. Each repayment covers that period's interest first, and the rest reduces the balance. The standard amortisation formula is:
Repayment = L × r ÷ (1 − (1 + r)−n)
Here L is the loan amount, r is the interest rate per period (the annual rate divided by 12 for monthly repayments), and n is the total number of repayments.
Worked example
A $1,500,000 commercial property bought with a $525,000 deposit needs a $975,000 loan — an LVR of 65.0%. At an example rate of 7.50% over 20 years:
| Repayment type | Monthly repayment | Total interest |
|---|---|---|
| Principal & interest | $7,855 | $910,088 |
| Interest-only for 5 years, then P&I | $6,094, then $9,038 | $1,017,532 |
| Interest-only for the full term | $6,094 | $1,462,500 plus $975,000 still owed |
Interest-only keeps the monthly cost down, but you pay more interest overall and still owe the whole loan at the end.
Principal & interest vs interest-only
Principal & interest builds equity every month and is what most long-term lenders expect once a property is stabilised. Interest-only suits a deal where cash flow matters more than paying down debt for now — a building being re-leased, a short-term bridging loan, or a purchase you plan to refinance or sell.
Our short-term commercial loans run 3–24 months and are typically interest-only with the balance repaid at exit. Long-term non-bank finance runs 20–30 years on interest-only or structured principal & interest repayments.
What LVR do commercial lenders accept?
LVR (loan-to-value ratio) is the loan divided by the property's value. Commercial lenders cap it lower than home lenders because commercial property is harder to resell and its value depends on the lease. Across our panel, commercial security is funded up to 70% LVR — so plan for a deposit of at least 30% plus purchase costs.
LVR is only half the test. The lender also checks that rent or business income covers the repayments with room to spare. Our commercial property borrowing calculator runs both tests and shows which one limits your loan.
Commercial mortgage calculator vs home loan calculator
The repayment maths is the same. What changes is the inputs a lender will accept:
- Deposit: commercial loans usually need 30% or more; home loans can go much lower.
- Rate: commercial loans are priced on risk — the property, the lease, the LVR and the borrower — and usually sit above home loan rates.
- Term: banks often write commercial facilities on shorter terms that are reviewed and rolled over, even when the repayments are calculated over 15–25 years.
- Serviceability: lenders test whether the rent covers the debt (DSCR), not just your personal income.
What a calculator can't tell you
A calculator can't price your deal. Commercial rates start from the Reserve Bank'sofficial cash rate and then move with the LVR, the security, bank versus non-bank, the term and your exit. That's why a generic rate is one of thecommercial property loan myths that catch borrowers out. Fees, valuation conditions and the facility term all change the real cost, too.
Use the numbers above to sense-check a deal. When you want a real number, send it through — we turn around an indicative term sheet in 24–48 hours. For more on how lenders assess a deal, read our guide to commercial property loans in NZ or see our commercial property finance lending criteria.