Commercial Mortgage Calculator
To help you compare mortgage packages we’ve created this easy to use a commercial mortgage calculator. Use it to determine what your budget or cash flow is.
Our commercial mortgage calculator provides you with financial answers so that you can look for the best deal. It does this by approximating costs. You can calculate figures for both interest only and repayment mortgages using the tool below:
What is a commercial mortgage?
If you’re looking for a loan on any type of property that is not your residence, you’ll need to look for a commercial mortgage. Whether it’s for retail premises, a workshop, a pre-school or nursery building or even a hotel, if you don’t buy it outright – you’ll need to apply for a commercial mortgage. Buy to let mortgages are packaged for a volume market, but are still classified as commercial mortgages.
As all other premises are very different, a commercial mortgage needs to be assessed on an individual basis and priced accordingly.
Business loans can typically be for any amount of money up to £25,000 and unsecured. Commercial mortgages are the vehicle in which more money can be offered but it comes with the requirement to add more security as lenders want security for above this amount.
There is more administration and therefore more cost involved in adding more security. For this reason, lenders will usually offer you a minimum loan of between £50,000 and £75,000.
Uncover the latest deals and best rates for your business using our commercial mortgage calculator. Click here to get started – it only takes 60 seconds!
What can you offer as security?
Typically lenders will consider taking just the property you are buying as security for your loan. As they’ll want you to use a deposit of 30%, they will loan you up to 70% of the value of the property. If you don’t have that amount of deposit available, it’s possible to offer other property that you have significant equity in as security. Otherwise, even shares or an insurance program may be acceptable as security to lenders. If you’re a business that is top performing, you may qualify for a commercial mortgage of up to 80% LTV (loan to value).
Is it possible to get a commercial mortgage on a leasehold property?
Most lenders will only give you a commercial mortgage on properties that have a lease or more than 70 years.
How long can you get a commercial mortgage for?
Lenders typically offer commercial mortgages for anywhere between 3 and 25 years. A property development loan or a bridging loan may also be available from lenders. This is a short-term loan that can be in place for anywhere between just a few weeks to 2 years.
What terms are commercial mortgages offered on?
Commercial mortgages are typically offered on a variable rate term. Expect a rate to be quoted as x% over base rate or LIBOR. When this same system is applied to residential properties, it’s referred to as a tracker mortgage. For amounts under £500,000, fixed rate mortgages are available. Lenders may offer you a commercial mortgage with a ‘swap’ contract, we recommend you avoid the offer. They are usually complex and are not suitable for SME borrowers.
The rates offered with commercial mortgages are usually based on how much of a risk the lender feels they are taking. Each rate is priced individually to match the risk involved including how much experience you have had in the industry, how well your business is performing or what your new business plans are. However, the fees of commercial mortgages are usually easier to understand.
What are the fees for commercial mortgages?
Lender arrangement fees are typically between 0 and 1.7%. In some cases, lenders may encourage you to move your business banking in exchange for offering you better terms.
Commercial mortgage calculator
Use our commercial mortgage calculator to gain clarity on what your financial boundaries and limits are likely to be. Just as with residential property, it’s possible to pay off a commercial mortgage for a business property early. Whether you can do this will depend on how well your business does and how well you manage your expenditure.
Our commercial mortgage calculator enables you to play with the numbers and work out how you can save over the life of your business loan.
Check with your lender that you can pay back your mortgage early. Even if you can’t pay a lot more on your commercial mortgage every month, do try to pay in more than the minimum due as much as possible. In months when your business performs well, you can make up for the months that were short.
Our commercial mortgage calculator helps you to understand where you stand with applying for your mortgage and what is possible for you on different interest rates.