This commercial refinance calculator shows how large a new loan your property can support, using the two tests lenders size a refinance on: debt service coverage (DSCR) and loan to value. Enter the property's net operating income and value, and it shows which test limits the loan, the monthly payment, and whether the new loan pays off the one you have now. Everything updates as you type.
It's built for income-producing commercial property: apartments of five or more units, retail, industrial, office and similar. It doesn't model a 1-4 unit rental "DSCR loan".
Your property
Your numbers
| Loan the income supports (DSCR test) | $0 |
| Loan the value supports (LTV test) | $0 |
| Annual debt service | $0 |
| DSCR at the maximum loan | n/a |
| LTV at the maximum loan | n/a |
| Debt yield (NOI ÷ loan) | n/a |
| Closing costs | $0 |
| New loan vs current balance (after costs) | n/a |
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How is a commercial refinance sized?
Lenders run two tests and lend the smaller answer.
- DSCR test. Divide net operating income by the minimum DSCR. That's the most annual debt service the income can carry. Turn it into a loan amount using the rate and amortization.
- LTV test. Multiply the property value by the maximum loan to value.
- Take the lower of the two. That's the maximum loan. The calculator tells you which test set it.
- Compare it with what you owe. Maximum loan minus closing costs minus your current balance is your cash out, or, if it's negative, your refinance gap.
Hypothetical example: a $15,000,000 property
Hypothetical example: round illustrative figures, not market data or a quote. A property with $1,000,000 of net operating income, valued at $15,000,000, refinancing at an assumed 7.0% on a 30-year amortization, with a 1.25x minimum DSCR and a 65% maximum loan to value.
| Most debt service the income carries ($1,000,000 ÷ 1.25) | $800,000 a year |
| Loan the income supports (DSCR test) | $10,020,505 |
| Loan the value supports (65% of $15,000,000) | $9,750,000 |
| Maximum loan (the LTV test is lower) | $9,750,000 |
| Monthly payment | $64,867 |
| DSCR at that loan | 1.28x |
| Debt yield ($1,000,000 ÷ $9,750,000) | 10.3% |
With a $9,000,000 balance to pay off, that loan leaves $750,000 before closing costs. At an assumed 8.0% instead, the income would support about $9,086,000, below the LTV limit, so the DSCR test would set the loan. Try your own rate above and watch which test takes over.
What if the new loan doesn't cover what I owe?
That shortfall is the refinance gap. The usual ways to close it are bringing cash to closing to pay the balance down, extending or modifying the current loan, or using a short-term bridge loan while income or value catches up, then refinancing into permanent debt. Each has a cost; the bridge loan calculator shows what a bridge would add.
Commercial refinance calculator FAQ
What is DSCR? Debt service coverage ratio is net operating income divided by annual debt service. A 1.25x DSCR means the property earns $1.25 for every $1.00 of loan payments.
What is debt yield? Net operating income divided by the loan amount, shown as a percentage. It ignores the rate and amortization, so some lenders use it as a third sizing test.
Why does a higher rate shrink my loan when the value hasn't changed? The DSCR test depends on the payment. A higher rate raises the payment on every dollar borrowed, so the same income supports fewer dollars.
Does interest-only change the result? Yes. Enter 0 for amortization and the payment covers interest only, which lets the same income carry a larger loan under the DSCR test. The LTV test doesn't change.
Can I use this for a 1-4 unit rental? The math is the same, but this page and Northern Ridge Capital cover commercial real estate only, on loans from $5 million to $30 million.
Keep going
See how refinancing works on our commercial property refinance page, check current rate context in the commercial real estate rate report, or try the commercial bridge loan calculator.
For planning only. This is an estimate based on the figures you enter, not a quote, an offer, or a commitment to lend. Actual terms are set by third-party lenders subject to underwriting. Northern Ridge Capital is a licensed commercial mortgage broker (CA DRE #02093377), not a lender, arranging financing on commercial real estate only. Full disclosures.