Commercial loans typically range from five years (or less) to 20 years, and the amortization period is often longer than the term of the loan. A lender, for example, might make a commercial loan for a term of seven years with an amortization period of 30 years. In this situation, the investor would make payments for seven years of an amount based on the loan being paid off over 30 years, followed by one final “balloon” payment of the entire remaining balance on the loan. The loan amount of a commercial mortgage is generally determined based on loan to value (LTV) and debt service coverage ratios. Lenders usually require a minimum debt service coverage ratio which typically ranges from 1.1 to 1.4; the ratio is net cash flow (the income the property produces) over the debt service (mortgage payment). Commercial mortgage LTV’s are typically between 55% and 70%, unlike residential mortgages which are typically 80% or above.