Commercial mortgage calculator

What your result means

Compare capital repayment and interest-only estimates for commercial property borrowing. The interest-only monthly figure is lower because the original loan remains to be repaid separately.

Compare scenarios by changing one input at a time. The glossary explains the technical words used on this page.

Estimated monthly payment

Either a capital-and-interest payment or interest alone, depending on the repayment type selected.

Mortgage amount

Property value minus the deposit entered.

Loan to value

The loan as a percentage of the entered property value.

Total interest

Modelled interest over the full term at the entered rate.

Arrangement fee

The entered fee percentage multiplied by the loan amount, not the property value.

Fee-adjusted total cost

Original loan plus total interest plus the arrangement fee. For interest-only borrowing this includes the capital still due at the end. It excludes the deposit.

Methodology: how the calculation works

The amount borrowed is the entered property value less the deposit. We then use either amortisation or a simple monthly interest calculation, depending on the selected repayment type.

1. Calculate the loan and LTV. Divide the annual interest percentage by 100 and 12, and multiply the term in years by 12.
2. For capital repayment, calculate equal monthly payments that clear the loan by the end. For interest only, multiply the loan by the monthly rate.
3. For capital repayment, total interest is all monthly repayments less the original loan. For interest only, it is the monthly interest multiplied by the number of months.
4. Apply the arrangement-fee percentage to the original loan. Add capital, interest and this fee for the fee-adjusted total cost.

The assumptions behind your estimate

• The entered rate stays unchanged for the full term, not just an initial deal period. The pre-filled rate is an illustration, not a live offer.
• Payments occur at the end of each month. Daily interest, irregular dates, missed payments and changes of rate are not modelled.
• Money is displayed to the nearest pound. Totals use unrounded calculations, so multiplying the displayed payment by the number of months can differ from the displayed total.
• The fee is paid separately, not added to the loan. There is no interest charged on it in the estimate.
• The loan and property value do not change except for scheduled capital repayment. No rent, business income, overpayment, payment holiday or final refinancing terms are modelled.

Two simple worked examples

Both examples use a £500,000 property, £150,000 deposit, 7.25% annual interest, a 20-year term and a 2% arrangement fee. Only the repayment type changes.

A closer look: deposit, term and repayment type

Compare a larger deposit, a shorter repayment period and interest-only payments. Every row includes the original capital in its total cost, including capital repaid at the end.

On a small screen, swipe the table sideways to see every figure.

A larger deposit reduces borrowing and the percentage-based fee. A shorter capital-repayment term increases monthly payments but reduces interest at the same positive rate. Interest-only payments leave the entire capital outstanding; do not interpret them as paying off the property more cheaply each month.

Examples use the stated assumptions and the existing calculator’s rounding. They are illustrations, not product offers, personalised recommendations or guarantees.

What the estimate does not include

• Valuation, legal and broker fees; property purchase taxes; insurance; and any charges beyond the arrangement fee entered.
• Changing rates, rent gaps, maintenance, business cash-flow changes and the cost or availability of refinancing.
• Assessment of rental income, trading accounts, security or any personal guarantee. The tool does not determine which lending rules apply to the proposed arrangement.

Commercial mortgage glossary: the words explained

Plain-English definitions of the finance, calculation and technical terms used on this page. Dotted links take you directly to the relevant definition.

Affordability / affordability check

An assessment of whether payments fit income, spending and other financial commitments. This tool does not perform that assessment.

Amortisation

Paying off borrowing gradually through regular payments covering interest and some capital. With a constant rate and payment, the interest share reduces as the balance falls.

Annual / monthly rate

Annual means per year; monthly means per month. A monthly rate is not interchangeable with an annual rate. The methodology explains this tool’s conversion.

APRC (annual percentage rate of charge)

A mortgage cost-comparison percentage including interest and applicable fees over the full term using specified assumptions. It is not the interest-rate input.

Arrangement fee / product fee / lender fee

A charge for setting up or providing a financial product, separate from interest. A percentage fee needs a stated base amount.

Balance / outstanding balance

The money held in an account, or the amount still owed on a loan, at a given time.

Balloon / final capital payment

A larger amount left to pay at the end of a finance agreement. It is separate from the regular instalments.

Broker / credit broker / broker fee

A business that introduces customers to finance providers or helps arrange finance, rather than lending the money itself. A broker fee is a charge for that service.

Capital / principal / amount borrowed

The original money borrowed, separate from interest. Paying back capital reduces the outstanding loan.

Cash flow

Money coming into and going out of a business or household over time. A low payment does not by itself show that borrowing is affordable.

Commercial mortgage / commercial property

A mortgage used for business property, such as premises used by a business or let to a commercial tenant.

Credit / finance / borrowing

Money made available to borrow and repay later, usually with interest or charges.

Credit check / credit status / credit history

A check of information about past borrowing and repayments, and the financial record it describes. Providers may use it when assessing an application.

Deposit

Money contributed towards a purchase without borrowing it. Here it reduces the amount financed.

Early repayment charge / early settlement charge

A charge that may apply when some or all of borrowing is repaid ahead of schedule. The agreement sets out any conditions and limits.

Eligibility / lender criteria

The requirements a provider sets for an application. A calculated repayment does not show that an applicant qualifies.

Estimate / illustration / projection

A result based on stated inputs and assumptions, not a promise of what will happen or a provider’s offer.

Exit strategy / refinance

The plan to repay short-term borrowing, such as a sale or replacement loan. Refinance means replacing existing finance; it is not guaranteed to be available.

Financial Conduct Authority (FCA) / authorised and regulated

The UK financial-services regulator named in the site footer. Authorisation gives a firm permission for specified activities; regulation means it must follow the applicable rules.

Fixed rate / deal period

A fixed rate stays unchanged for an agreed period. That period may be shorter than the whole loan term.

Insurance

Cover bought for specified losses or events, subject to the policy’s conditions. Its price is not automatically included here.

Interest / interest rate

Interest is a charge for borrowing or a return paid on savings. The rate expresses it as a percentage over a stated period.

Interest-only

Regular payments cover interest without paying back the original loan. The capital must be repaid separately, usually at the end.

Legal fees

Charges for legal work involved in a purchase or finance arrangement.

Lender / provider

The organisation supplying a loan or financial product and setting its terms.

Loan-to-value (LTV)

The loan as a percentage of the property value: loan ÷ value × 100. This tool uses the values entered, not a lender’s valuation.

Methodology

The calculation method, steps and assumptions behind an estimate.

Mortgage / secured borrowing / security

A loan backed by an asset such as property. Security is the asset a lender may use to recover unpaid borrowing through the applicable legal process.

Overpayment / one-off payment / lump sum

An amount paid in addition to the regular amount due. A one-off payment or lump sum is paid once; a monthly overpayment repeats.

Payment holiday

An agreed pause or reduction in payments. It is not modelled and can change the balance and total cost.

Personal guarantee

A promise by an individual to repay business borrowing if the business does not. The agreement determines their obligations.

Property price / property value

Price is the amount paid; value is an assessment of what a property is worth. They can differ.

Quote / finance offer

Proposed prices and conditions from a provider. It is different from an illustration and may still depend on checks or conditions.

Rental income

Money received for allowing someone to use a property. This calculator does not check whether it covers the borrowing costs.

Repayment / monthly payment

Money paid back to a lender. A capital-and-interest payment covers interest and reduces the amount borrowed. An interest-only payment does not reduce it.

Repossession

The legal process by which a lender can take possession of an asset after repayments are not kept up. It may be sold to recover money owed.

Rounding / unrounded

Shortening a number for display. An unrounded calculation keeps the more precise value when working out totals.

Tax / tax treatment

An amount that may be payable to government and the rules deciding how it applies. The applicable rules depend on the transaction and circumstances.

Term / repayment period

The length of time over which the calculation runs. For borrowing, it is the planned repayment period, not necessarily the length of an introductory rate deal.

Total interest

All the interest in the calculation, excluding the original loan and any separately stated fees.

Total repayable / total payable

The combined amounts counted by this tool. Read the results explanation to see whether fees, deposits or a final capital payment are included.

Trading history / trading accounts / business performance

Information about a business’s past activity and financial results, including income, costs and profit or loss.

Upfront fee / upfront payment

Money paid at the start instead of added to the loan or paid at the end.

Valuation / valuation fee

An assessment of what a property is worth and any charge for it. This is not a detailed survey of its condition.

Frequently asked questions