Commercial Real Estate Financing: Amortization Schedules and Balloon Term Payments

Commercial Property Financing Basics Commercial real estate loans operate differently than standard 30-year residential home mortgages.

The Balloon Payment Structure Lenders limit exposure on business loans. While they calculate monthly payments using a 20 or 25-year amortization table, they set the actual mortgage term to 5, 7, or 10 years. At the end of this maturity period, the remaining loan balance is due as a lump-sum **balloon payment** that must be refinanced or paid in cash.