Use our free commercial mortgage calculator to find out likely costs of taking out a new commercial mortgage. Your monthly payments are vitally important to creating a budget and understanding your cash flow when searching for a property.
Our calculator allows you to work out your mortgage repayment on both an interest only and capital repayment basis.
Use this calculator to work out your monthly repayments.
Fill in the form below to talk through your requirements with an expert.
Or call us now on 01922 620008
How do I use the commercial mortgage calculator?
Step 1 – Input your desired loan amount. The maximum loan to value (LTV) is usually 75% of the property value. You can calculate the LTV by multiplying the property value by the desired LTV and then pressing the percent key on your calculator.
For example, for 75% LTV on a £200,000 property you would input 200,000×75%. The result in this case would be £150,000.
Step 2 – Input the interest rate that you’re likely to pay. Information on likely rates based on a number of circumstances can be found further down the page.
Step 3 – Finally, input the number of years you’d like to borrow over. The maximum term on commercial mortgages is often 20 years, although a small number of lenders will allow borrowing over 25 years.
Once you’ve done this, hit calculate and your results will be shown.
Want to Know More…?
Read on below or use the following panels to look for more information on commercial mortgages.
Commercial mortgage interest rate & term
The commercial mortgage calculator will offer you accurate terms, based on the information input. If the figures inputted are incorrect, then the figures will be of little help to you.
Of course, it’s simple to input the mortgage amount and your chosen term, but the interest rate can be trickier.
The rate and lender fee offered will vary depending on whether your property will be owner-occupied (often called business mortgages), or used as a commercial investment property.
Below are a number of products that can be used as example figures for the purpose of the business mortgage calculator.
Owner-occupied – clean credit history
Owner-occupied loans for applicants with clean credit history tend to be priced depending on the amount of money borrowed. As the mortgage amount increases, the rate charged reduces as competition between lenders to secure your business finance application increases.
| Amount Borrowed | £50,000 – £99,999 | £100,000 – £249,999 | £250,000 – £499,999 | £500,000 – £1,999,999 | £2,000,000+ |
| Interest Rate | 4% | 3.50% | 3.25% | 3% | 2.50% |
Commercial investment – clean credit history
Commercial investment rates are usually slightly higher than mortgages for owner-occupied properties. Very low interest rates are still available, however, especially for larger loans.
| Amount Borrowed | £50,000 – £99,999 | £100,000 – £249,999 | £250,000 – £499,999 | £500,000 – £999,999 | £1,000,000+ |
| Interest Rate | 4.75% | 4.00% | 3.75% | 3.15% | 2.85% |
Commercial property – light adverse
Commercial Property mortgages for those with minor adverse credit tend to be priced according to the loan to value (LTV). This is also true other minor demerits, such as struggles with traditional affordability calculators or short-leases for investment properties.
The below rates are a guide, although the rate charged may vary, and even drop for loans above £1,000,000.
| Loan to Value (LTV) | 55% LTV | 60% LTV | 65% LTV | 70% LTV | 75% LTV |
| Interest Rate | 4.89% | 5.14% | 5.39% | 5.49% | 5.59% |
Semi commercial property – light adverse
As with the rates above, commercial investment mortgages that won’t fit the high street tend to be priced according to LTV. Again, as above, for loans above £1,000,000, we may be able to offer lower rates.
| Loan to Value (LTV) | 55% LTV | 60% LTV | 65% LTV | 70% LTV | 75% LTV |
| Interest Rate | 4.29% | 4.79% | 4.79% | 5.29% | 5.29% |
Owner-occupied or commercial investment – heavy adverse
In situations where there is heavy adverse credit in the background, or other significant factors affecting the application, a rate of 7-8.5% is realistic. In many cases, loans at this sort of rate will be flexible and understanding of any historic problems.
Choosing the right term
The term depends on several factors. Each lender will have their own rules based on the borrower and the security property. Generally speaking, capital repayment applications are available for terms of 3-20 years, with some lenders allowing terms of up to 25 years.
Interest only deals tend to be available from 3-10 years – or even beyond this subject to a small loading to the interest rate.
Borrowers in certain industries may find that the mortgage terms offered are shorter. For instance, some lenders reduce the maximum term to 15 years for retailers. This is due to the perceived strength of the sector, and therefore the risks of lending to the sector in the long term.
Capital Repayment Or Interest Only
Whether you take your mortgage on a capital repayment or interest only basis is an important consideration.
- Capital repayment mortgages have higher monthly payments. This is because each month, a portion of the amount owed is repaid, along with the interest. The amount owed, therefore, reduces each month, with the loan being fully repaid at the end of the term.
- Interest only mortgages require the interest to be paid monthly, with no contribution to the repayment of the outstanding capital. As only interest is paid each month, the full loan amount remains outstanding and must be repaid at the end of the term.
Commercial mortgages are available on interest only, or full capital repayment. The number of lenders offering interest-only is limited, however. This means that by excluding any repayment mortgages from consideration, you may have to pay a higher rate.
When calculating your repayments, working from the capital repayment, rather than the interest-only figure is advised. By contacting us, or heading to our commercial mortgage comparison page, we will be able to give you an idea of costs based on your circumstances.
Buy a property for your business using commercial mortgages
Our calculator can be used to calculate the costs of a mortgage for your business. The monthly repayments can be compared to your potential rent payments.
Of course, capital repayment loans are paid off over the term of the loan, whereas rental payments are an ongoing expense.
How do interest rates on commercial mortgages compare to bridging loans?
Bridging finance rates are usually much higher than those charged on a commercial mortgage.
Rates for commercial bridging loans usually start at 0.65% per month (7.8% per year), whereas commercial mortgage rates are often below 3% per year.
What type of property can I finance using commercial mortgages?
We can fund all types of commercial property, with our acceptable security including:
How much deposit will I need to qualify for a commercial mortgage for my business?
It’s usually possible to borrow up to 75% of the properties value, meaning the remaining 25% must be made up of the applicants’ equity.
In addition to the deposit, most deals come with other costs, such as the arrangement fee, surveyors’ fees and legal costs.
Of course, stamp duty must also be considered. Commercial stamp duty rates differ from residential rates, so care must be taken to ensure you understand the charges for your property.
Do you provide interest only commercial mortgages?
Yes, we can offer interest only mortgages for up to 20 years, in addition to capital repayment or part and part repayment methods.
About The Author
This content was produced by our Commercial Lending Director, Gary Hemming. Gary has over 15 years’ experience in financial services and specialises in bridging loans, commercial mortgages, development finance and business loans. He is widely respected in his field and regularly provides expert commentary for specialist trade publications, specialist business press as well as local and national press.
Gary Hemming CeMAP CeFA CeRGI CSP -
Commercial Lending Director
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