Commercial mortgage calculator
The monthly payment is the easy part. This also works out the two figures a commercial lender underwrites on — loan to value and interest cover — and stresses the cover at a higher rate, the way a credit committee will.
| Total interest over the term | £0 |
| Total repaid | £0 |
| Stamp duty, if buying | £0 |
| Loan to value | 0% |
| Interest cover | — |
| Interest cover if rates rise 2% | — |
What a commercial lender actually checks
Commercial lending works differently from a residential mortgage. A residential lender underwrites you. A commercial lender underwrites the property, and asks whether it can service the debt on its own.
Loan to value
Most commercial lenders will go to 70% of value, a few to 75%. Above that the options narrow sharply and pricing rises. An investment property let on a long lease to a strong covenant will stretch further than an owner-occupied unit in a weak location.
Interest cover
Rent divided by your annual mortgage payments. Lenders typically want at least 1.25, so the rent covers the payments with a quarter to spare. The part that catches people out is that most now stress this at two or three percentage points above the rate you are actually paying — which is why a deal that works today can still be declined.
Stamp duty
Commercial property uses a lower scale than residential. Nothing below £150,000, then 2% to £250,000, then 5% above that. The figure above assumes a freehold purchase in England or Northern Ireland; Scotland and Wales have their own regimes.
Why the term matters more than people expect
Stretching a loan from 15 years to 25 cuts the monthly payment and lifts the interest cover, which can be the difference between an offer and a decline. It also costs considerably more in total interest. Change the term above and watch both move.
Have these numbers checked
A chartered management accountant reads the deal the way the credit committee will, and tells you which lenders would look at it and at roughly what rate. No cost, no obligation.
Sent. We will come back to you within one working day.
Your figures above are sent with the enquiry. We use your details only to reply and never pass them on. You can also just email hello@granton.finance.