A commercial mortgage calculator shows the monthly cost of a loan secured on business property. For example, a £400,000 property with a £100,000 deposit is a 75% LTV mortgage; over 20 years at 6% it costs about £2,149 a month on a repayment basis. Real offers depend on the lender, the property and your business, and are subject to status.
Work out a commercial mortgage
An illustration, not a quote. Lenders set their own rates, fees and terms, and any offer is subject to status and lender criteria.
Check your funding options| Year | Paid in the year | Of which interest | Balance at year end |
|---|---|---|---|
| 1 | £25,788 | £17,782 | £291,994 |
| 2 | £25,788 | £17,289 | £283,495 |
| 3 | £25,788 | £16,763 | £274,470 |
| 4 | £25,788 | £16,210 | £264,892 |
| 5 | £25,788 | £15,616 | £254,720 |
| 6 | £25,788 | £14,988 | £243,920 |
| 7 | £25,788 | £14,324 | £232,456 |
| 8 | £25,788 | £13,614 | £220,282 |
| 9 | £25,788 | £12,865 | £207,359 |
| 10 | £25,788 | £12,069 | £193,640 |
| 11 | £25,788 | £11,220 | £179,072 |
| 12 | £25,788 | £10,323 | £163,607 |
| 13 | £25,788 | £9,370 | £147,189 |
| 14 | £25,788 | £8,357 | £129,758 |
| 15 | £25,788 | £7,282 | £111,252 |
| 16 | £25,788 | £6,139 | £91,603 |
| 17 | £25,788 | £4,930 | £70,745 |
| 18 | £25,788 | £3,643 | £48,600 |
| 19 | £25,788 | £2,276 | £25,088 |
| 20 | £25,914 | £826 | £0 |
How does the commercial mortgage calculator work?
The mortgage is the property value less your deposit. The calculator shows the loan to value (LTV), then the monthly payment for the term and rate you enter. On a capital and interest (repayment) mortgage, the payments clear the loan by the end of the term; on interest only, you pay just the interest and still owe the whole loan at the end.
It assumes one rate for the whole term. In practice many commercial mortgages fix the rate for 1 to 10 years and then move to a variable rate, so the payment can change. It does not include valuation, legal or arrangement fees, or Stamp Duty Land Tax on a purchase. Our guide to commercial mortgages covers those costs.
Repayment or interest only: what is the difference?
| Basis | Monthly payment | Total interest | Still owed at the end |
|---|---|---|---|
| Capital and interest | £2,149 | £215,886 | £0 |
| Interest only | £1,500 | £360,000 | £300,000 |
Interest only lowers the monthly payment but costs more interest over the term, and you need a plan to repay the loan at the end, such as a sale or a refinance. Lenders that offer it often limit the interest-only period or the LTV; Redwood Bank, for example, publishes interest-only terms of up to 20 years within a maximum 30-year term.
How much deposit do you need for a commercial mortgage?
Lenders cap the mortgage as a share of the property's value, so the deposit is the gap. A bigger deposit lowers the LTV, the monthly payment and the interest, and can bring a better rate, because the lender's risk falls. Owner-occupied premises with a trading business behind them are often treated differently from investment property let to tenants.
| Deposit | Loan to value | Monthly payment | Total interest |
|---|---|---|---|
| £80,000 | 80% | £2,293 | £230,132 |
| £100,000 | 75% | £2,149 | £215,886 |
| £140,000 | 65% | £1,863 | £186,994 |
How does the term change the payment?
Commercial mortgages run for much longer than other business loans; lenders in our directory publish terms of up to 30 years. A longer term lowers the payment but raises the interest:
| Term | Monthly payment | Total interest |
|---|---|---|
| 10 years | £3,331 | £99,661 |
| 15 years | £2,532 | £155,627 |
| 20 years | £2,149 | £215,886 |
| 25 years | £1,933 | £279,831 |
The 6% in these examples is a round figure to show the sums, not a rate any lender will offer you. Try the rates in any offers you have, and a higher one to test what happens if a variable rate rises.
What do commercial mortgage lenders look at?
- The property: its type, condition, location and how easily it could be sold or let.
- Affordability: for owner-occupied premises, the business's profits; for investment property, the rent against the payments.
- The deposit and LTV: how much of your own money is in the deal.
- The business and its owners: trading history, accounts, credit record and experience.
A loan to an individual or trustees secured on land that is at least 40% used as a dwelling can be a regulated mortgage contract (article 61 of the Regulated Activities Order). Loans to limited companies and on purely commercial property are not.
How do you get real figures for your property?
Capzy is a credit broker, not a lender, and is paid by the lender. You can check your funding options with a soft search that does not affect your credit score; any offer is subject to status and lender criteria. If you need short-term money before a mortgage completes, the bridging loan calculator shows what a bridge would cost.
Sources
- How to finance a commercial property purchase, British Business Bank
- Regulated Activities Order 2001, article 61: regulated mortgage contracts, legislation.gov.uk
- Stamp Duty Land Tax, GOV.UK
Capzy is a credit broker, not a lender. We get paid by the lender. This page is general information, not financial, tax or legal advice. Finance is subject to status, lender criteria and affordability; rates and terms depend on your circumstances.