Commercial Mortgage Calculator UK
Model indicative monthly repayments, assess Capital & Interest vs Interest-Only structures, and evaluate bank Interest Cover Ratio (ICR) stress tests for UK corporate property debt.
Applying for a UK Limited Company Commercial Mortgage?
Review our whole-of-market Commercial Mortgages facility or consult our Complete Commercial Mortgages Guide.
Commercial Mortgage Debt & ICR Calculator
Model capital & interest amortisation, interest-only payments, and bank stress-testing covenants.
UK commercial lenders require rental income to exceed debt payments by 125%–145% to absorb void periods, insurance, and maintenance.
Indicative Transaction & Lender Costs (Estimated)
How Commercial Mortgage Calculations Work in the UK
Unlike residential consumer mortgages based solely on individual salary multiples, commercial debt is underwritten against asset yield, corporate cashflow, and stress-tested covenant ratios.
LTV & Equity Sizing
Loan-to-Value (LTV) represents the percentage of the property valuation a lender will fund. Commercial facilities typically cap at 70% to 75% LTV, requiring the corporate borrower to contribute a minimum 25% cash equity deposit.
Read First-Time Buyer Guide →ICR & Debt Coverage
The Interest Cover Ratio (ICR) benchmarks the rental revenue against debt obligations. For UK Limited Companies, lenders require between 125% and 145% coverage at a nominal stress rate to ensure financial viability through economic cycles.
Read SPV vs Personal Guide →Amortisation Structure
Borrowers can select Capital & Interest amortisation (gradually reducing loan principal over 15–25 years) or Interest-Only facilities (retaining maximum operating liquidity, typically paired with a 5-year refinance horizon).
Read Commercial Mortgage Guide →Commercial Lending Benchmarks & Rate Factors
Pricing Variables
- •Reference Rate Margins: Commercial loans are priced over the Bank of England Base Rate or SONIA (typically base + 2.25% to 4.5%).
- •Tenant Covenant Strength: Properties let to Blue-Chip or governmental tenants secure tighter margins than short unexpired lease terms.
- •Asset Classification: Prime logistics and modern light industrial units command lower interest rates than high street retail or leisure assets.
- •Director Track Record: Established property companies with proven landlord experience receive tier-1 lender terms.
Estimated Transaction Costs
- •Lender Arrangement Fees: Generally 1.0% to 2.0% of the gross loan amount, usually capitalised onto the advance.
- •RICS Commercial Valuation: £1,200 to £5,000+ depending on asset complexity, turnover, and market value.
- •Dual Legal Representation: Corporate commercial mortgages require separate legal representation for both borrower and lender.
- •Non-Residential Stamp Duty (SDLT): Tiered commercial HMRC tax (0% up to £150k, 2% £150k–£250k, 5% thereafter).
Frequently Asked Questions
Technical guidance on UK Limited Company commercial mortgage underwriting.
What interest rates can our UK Limited Company expect on a commercial mortgage?
Commercial mortgage interest rates in the UK generally range from 4.5% to 8.5% per annum, priced as a commercial lender margin (typically 2.0% to 4.5%) above the Bank of England Base Rate or SONIA. Prime owner-occupied trading premises with strong company balance sheets attract the lowest margins, while speculative commercial investment property or complex asset classes command higher margins.
How does the Interest Cover Ratio (ICR) stress-test work for commercial property?
Underwriters apply an Interest Cover Ratio (ICR) covenant to ensure the property rental income sufficiently covers mortgage debt service with a safety cushion. Typical lender hurdles require rental coverage of 125% for Special Purpose Vehicle (SPV) Limited Companies, 130%–135% for semi-commercial mixed-use properties, and 140%–145% for pure commercial investments.
Should our company choose Capital & Interest or Interest-Only commercial finance?
Trading businesses purchasing their own operational premises often choose Capital & Interest repayment to build corporate balance sheet equity and clear the debt over 15 to 25 years. In contrast, property investment SPVs frequently opt for Interest-Only facilities to maximise monthly cash distributions and reinvest liquidity into acquiring further portfolio assets.
What is the maximum Loan-to-Value (LTV) available for UK commercial mortgages?
Standard commercial mortgage facilities provide up to 75% LTV for owner-occupied trading premises and standard investment assets. Semi-commercial properties usually cap at 70% to 75% LTV. Experienced borrowers offering additional corporate security or unencumbered portfolio charges can achieve up to 80%–100% funding through cross-collateralisation.
Are corporate commercial mortgages regulated by the Financial Conduct Authority (FCA)?
No. Commercial mortgages and business debt arranged strictly for corporate entities (UK Limited Companies, SPVs, and LLPs) are unregulated under FSMA 2000 (Regulated Activities Order 2001, Article 61 corporate borrower exemption). Commercial Mortgage Dealer operates exclusively in the unregulated commercial sector for UK corporate entities.
Related Commercial Property Finance Tools & Insights
Comprehensive financial modeling tools, underwriting guides, and case studies across our 100+ lender panel.
Commercial Bridging Loan Calculator
Model retained vs rolled-up interest (0.55%–1.45% pm) and net advance.
Development Finance Calculator
Senior debt sizing up to 90% LTC and 70% LTGDV with profit-on-cost checks.
Commercial Stamp Duty Calculator
HMRC non-residential tax slices (0%, 2%, 5%) and residential savings.
ICR Stress Test Calculator
Assess 125%–145% lender stress tests and find max borrowing capacity.
Commercial Rental Yield Calculator
Gross yield, Net Operating Income (NOI), and leveraged Cash-on-Cash returns.
Semi-Commercial Mortgage Calculator
Dual commercial and residential rent split with composite ICR modeling.
Contextual Guidance & Transaction Facilities
Ready to Match Your Calculation with Live Lenders?
Submit your transaction details directly to our corporate underwriting desk. We assess criteria across High Street institutions, specialist challenger banks, and debt funds.
Statutory Entity & Regulatory Notice: commercialmortgagedealer.com is a trading style of Hello Leads Ltd. Registered in England & Wales. Company No. 10286382. ICO Registration: ZB924628. Registered office: 1 Llandegfedd Close, Cardiff, Wales CF14 9HD.
We arrange commercial debt exclusively for corporate entities (UK Limited Companies, SPVs, and LLPs). Commercial mortgages and loans arranged for corporate entities are not regulated by the Financial Conduct Authority (FCA). We do not arrange regulated consumer mortgages.
Security Warning: Your property or company assets may be repossessed if you do not keep up repayments on a commercial mortgage or any other debt secured on it.