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Amortization is the process of spreading a loan into payments that consist of both principal and interest over a set timeline, called an amortization schedule.

Amortization tables show a detailed, chronological breakdown of every payment allocated towards a commercial real estate loan, helping you visualize how a loan is paid off in a transparent and understandable way.

Here’s how you can build an amortization table in 7 steps:

1. Date: This will be the payment date of the loan. Use the ‘EOMONTH’ formula in Excel to calculate the future payment dates in descending order.

2. Month & Year: Calculate the numeric month and year in descending order.

   

3. Monthly Payment: This will be the total payment paid to the lender every month. You will use the ‘PMT’ formula in Excel to calculate this.

4. Principle Payment: An easy way to calculate the principal portion of the payment is to subtract the interest amount from the total monthly payment.

5. Interest Payment: To calculate interest on a loan, multiply your annual interest rate by the beginning loan balance for that month, and divide by 12 (to get monthly payment).

   

6. Beginning Balance: This is your current outstanding loan balance in the beginning of the month.

7. Ending Balance: This is your outstanding loan balance for the month, less any principle paid. If your loan is interest only (no principle paid), the ending loan balance will not change.

Download our free amortization table and practice building it yourself! Or keep it to calculate loan payments for your next acquisition. Enjoy!

Click File, then download.

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📈 Chart of The Week

The Nation’s 10 Most Affordable Large Apartment Markets

It’s no surprise that the most affordable major apartment markets in the country are in the South and Midwest regions. Of the nation’s 50 largest markets, six of the most affordable were in the Midwest and four were in the South.

Taking the top three slots on the most affordable list are South region markets, with Greensboro/Winston-Salem taking the #1 spot with average effective asking rents of $1,209 in November, according to RealPage Market Analytics.

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