Use our free commercial mortgage calculator to find out likely costs of taking out a new commercial mortgage. Understanding your monthly payments is vitally important to creating a budget when searching for a property.
Our calculator allows you to work out your repayments on both an interest only and capital repayment basis.
Use this calculator to work out your monthly repayments.
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How Do I Use the Commercial Mortgage Calculator?
Our commercial mortgage calculator is designed to be easy to use and to provide you with the information you need quickly. Simply input your details and press ‘calculate’ and you will be given your monthly repayments on both a capital repayment and interest only basis.
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Read on below or use the following panels to look for more information on commercial mortgages.
Predicting Your Likely 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 meaningless and of little help to you.
The rate offered will vary depending on whether your property will be owner-occupied 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 commercial mortgage calculator.
Owner Occupied – Clean Credit History
Owner occupied loans for clients with clean credit history tend to be priced depending on the amount of money borrowed. For larger loans, the rate charged reduces as competition between lenders to secure your business 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 7.9-9.9% 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. But 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 tends 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 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 over 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. Interest only commercial mortgages tend to be restricted to a maximum of 75% loan to value (dependent on sector).
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 figure is usually 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.
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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