Commercial Loan Repayment Calculator

The formula

Commercial loan repayments use the standard amortisation formula:

M = L × [ r(1+r)ⁿ ] / [ (1+r)ⁿ − 1 ]

Where M is the monthly repayment, L is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). For interest-only periods the calculation collapses to M = L × r — no principal reduction, just interest service.

Practical borrower scenarios

$2M industrial purchase, owner-occupier

A Sydney panel-beater purchases a $2.8M industrial unit with $800k equity from his residential portfolio. $2.0M facility at 6.75% over 25 years P&I produces repayments of ~$13,800/month. He could elect interest-only at ~$11,250/month for the first 3 years to fund fit-out — a $2,500/month cash-flow advantage during the transition.

$5M office investment, sophisticated investor

A self-managed investor buys a tenanted suburban office at 6.5% net yield. $5.0M facility at 6.25% IO produces monthly interest of $26,040 — fully serviced by the property's $325k/year net rent with $300k surplus. After 5 years IO she rolls to P&I with the loan balance unchanged, having compounded the surplus into a deposit on a second asset.

$8M development site, refinance to bank

A developer holds residual stock at 9.5% with a private lender, paying $63,300/month IO on $8M. Refinancing to a major bank at 7.0% drops monthly cost to $46,670 — a $16,630/month saving, or $200k per year, that flows directly to net project return.

Typical lender policy

Major banks price commercial loans roughly 175–275bps above the 90-day BBSW, depending on LVR and asset class. They prefer 15–20 year amortising terms with interest-only capped at 3 years. Second-tier banks are slightly more flexible on IO term (up to 5 years) and accept thinner serviceability buffers. Non-bank lenders price 100–250bps above the banks but accept longer IO (up to full-term IO on lease doc), simpler servicing, and harder asset profiles. Private credit sits at 9–14% all-in, used for speed, transitional assets, or scenarios outside policy.

Rate-lock windows are typically 60–90 days from formal approval. If you're comparing scenarios, ask your broker to quote both nominal rate and comparison rate (which includes fees) — the gap is sometimes 30–50bps and changes the answer.

Related products

• Full Doc Commercial Loans → — sharpest rates for borrowers with full financials
• Low Doc Commercial Loans → — for self-employed without 2 years of returns
• Lease Doc Loans → — serviced from the property's own lease, not borrower income
• Commercial Refinance → — benchmark your existing loan against today's market

Where we lend

We arrange commercial finance across every metro market in Australia. See product and pricing specifics for Sydney, Melbourne, Brisbane, Perth, and the Gold Coast.