Amortization in commercial real estate financing works by spreading a loan into payments that consist of both principal and interest over a set timeline, called an amortization schedule. While some commercial real estate loans are fully amortizing, not all are. For example, balloon loans are typically only partially amortizing. In addition, interest-only loans (like many commercial construction loans) usually have a non-amortizing interest-only period, followed by a period that is either partially or fully amortizing.