Commercial mortgage calculator

How to use the commercial mortgage calculator

Enter the purchase price or value of the property, the amount you want to borrow, the interest rate, the term in years and whether the loan would be on a capital and interest or interest-only basis. If the property is let, or will be, add the annual rent and the calculator will show how many times the rent covers the yearly interest.

The results are illustrations based on your inputs, not a quote. Commercial mortgage rates and terms are set case by case, and a lender will look at the property, the business or the tenants, your experience and the valuation before making an offer.

What lenders look at on a commercial mortgage

Owner-occupier: your business pays the mortgage

If your own business will trade from the premises, the lender is mainly interested in whether the business can afford the repayments. Expect to provide recent accounts, management figures, business bank statements and details of the directors. A strong, stable trading record usually matters more than the building itself, although the valuation still sets the ceiling.

Investment: the rent pays the mortgage

For an investment property the lender looks at the tenant, the lease and the rent. The rental cover figure in the calculator shows how many times the annual rent covers the annual interest. Each lender sets its own minimum cover and stress rate, so treat the figure as a rough guide to how comfortable the deal looks rather than a pass or fail.

Semi-commercial and mixed-use

A shop with a flat above, or offices with residential upstairs, sits between residential and commercial lending. Lenders vary a lot in how they treat these properties. Our guide to semi-commercial mortgages explains what to prepare.

Deposit and loan-to-value

Loan-to-value (LTV) is the loan as a percentage of the property value. Commercial lenders typically want a larger deposit than for a home, and the maximum LTV depends on the property type, the trading history and the lender. Our article how much deposit do you need for a commercial mortgage? covers this in more detail.

Refinancing an existing commercial mortgage

If your current deal is coming to an end, run your existing balance through the calculator at today’s rates to see how the payment could change, then read our commercial remortgage review checklist. Reviewing early gives you time to compare options rather than drifting onto a lender’s standard rate.