What the payment includes
A level amortizing payment covers that month's interest first and applies the remainder to principal. Early payments are mostly interest; as the balance falls, more of each payment retires principal. On a $10,000,000 loan at an illustrative 7% amortized over 25 years, the monthly payment is about $70,678 and annual debt service is about $848,000.
The loan constant expresses annual debt service as a percentage of the original principal (about 8.48% in the example). Lenders use it to convert an income figure into a supportable loan amount: NOI divided by the constant, divided again by the required DSCR.
Amortization versus term
Amortization is the schedule the payment is calculated on; the term is when the loan actually matures. A 10-year term on a 25- or 30-year amortization leaves a balloon balance due at maturity that has to be refinanced or repaid from sale. Longer amortization lowers the payment and raises the balloon.
Bridge loans are usually interest-only, so this calculator applies to the permanent loan a bridge borrower plans to refinance into. Running the takeout payment at a stressed rate shows whether the stabilized NOI can support the refinance at a lender's minimum DSCR.
Limitations
The calculator assumes a fixed rate and monthly payments in arrears with no fees, reserves, or escrows. Floating-rate loans reprice with the index, and some lenders quote a 30/360 or actual/360 day count that changes the effective payment slightly.
The result is an arithmetic output from the numbers you enter. It is not a quote, a term, or an underwriting decision, and H Equities does not see or store what you type.