UK Commercial Mortgage Calculator
Estimate loan size, monthly payment, LTV, and total costs for a commercial mortgage in the UK.
DSCR is shown if rental income is provided. Many UK lenders look for around 1.25x or higher.
How to use this commercial mortgage calculator UK
This tool is designed for investors and business owners who want a quick estimate before speaking to a broker or lender. Enter the property value, your deposit, interest rate, term, and repayment type. The calculator then shows your likely monthly cost and the total amount paid over the term.
For a typical commercial mortgage in the UK, lenders often fund around 65% to 75% of the property value, though this can vary by sector, covenant strength, and deal structure. Your deposit and the resulting loan-to-value (LTV) ratio are therefore key.
What the calculator includes
- Estimated loan amount (property value minus deposit)
- Loan-to-value (LTV) percentage
- Monthly payment based on repayment method
- Total interest over the full mortgage term
- Total paid including fee when arrangement fee is added
- Optional DSCR estimate if rental income is entered
Repayment vs interest-only: important difference
Capital & interest (repayment)
Your monthly payment includes both interest and principal, so the balance reduces over time. This usually means higher monthly payments but no large balance left at the end.
Interest-only
You pay interest each month and keep the principal outstanding. Monthly costs are lower, but there is a balloon payment at the end unless refinanced or repaid from sale proceeds. Many commercial investors use this for cash-flow management, but exit planning is essential.
Typical UK commercial mortgage costs to budget for
Beyond the monthly mortgage payment, you should plan for transaction and running costs:
- Arrangement fee (often 1% to 2% of loan size)
- Lender valuation and survey fees
- Legal costs for both borrower and lender
- Broker fees (if using a broker)
- Insurance requirements and property management costs
- Potential early repayment charges
Example scenario
Suppose a property is worth £500,000 and you put down £150,000. Your loan is £350,000 (70% LTV). At 6.25% over 20 years, a repayment structure gives a higher monthly payment than interest-only, but it steadily pays down the debt. Interest-only lowers monthly outgoings, but the full £350,000 principal remains due later.
Use the calculator to compare both options with your own numbers. A small change in rate, term, or deposit can materially affect affordability.
Tips to improve eligibility and pricing
- Increase deposit to reduce LTV
- Prepare clear accounts and cash-flow projections
- Demonstrate strong tenant quality and lease terms (for investment properties)
- Show realistic rental coverage and operating assumptions
- Work with an experienced commercial broker to access specialist lenders
Frequently asked questions
What is a good LTV for a commercial mortgage in the UK?
Many deals land between 60% and 75% LTV. Lower LTV usually means lower risk for lenders and can support better pricing.
How is DSCR used?
Debt Service Coverage Ratio compares rent/income to mortgage cost. A figure of 1.25x or above is commonly targeted by many lenders, though criteria vary.
Is this calculator a mortgage offer?
No. It is an educational estimate, not financial advice or a lending decision. Actual terms depend on credit profile, sector, property type, tenant strength, and lender policy.