Commercial mortgage calculator
Estimate the deposit and monthly repayment on an industrial unit, workshop or trade counter. Capital and interest, or interest only.
Your estimate
Illustrative only. Not a quote or an offer of finance.
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How the commercial mortgage calculator works
The calculator takes the property price and your loan to value to work out the loan and the deposit. On capital and interest it then applies the standard amortising repayment formula, so the loan is fully repaid over the term. On interest only it charges interest on the full loan each month and leaves the loan outstanding at the end, to be cleared by sale or refinance.
The capital and interest monthly payment is the loan multiplied by the monthly rate, divided by one minus one plus the monthly rate to the power of minus the number of months. The monthly rate is the annual rate divided by twelve. Interest only is simply the loan multiplied by the annual rate, divided by twelve.
What drives a real rate on an industrial mortgage
A lender prices an industrial mortgage on the income behind it. On an investment purchase that means the rent, the tenant covenant, the lease length and the interest cover. For an owner-occupier buying their own unit or workshop, it means the trading business's accounts and debt service cover. Loan to value, typically 65 to 75 percent, the quality of the unit and its location all feed into the rate, with term loans indicatively from around 6 percent. Rates move with the wider market, so we quote them deal by deal. Use the calculator to model the deposit and the monthly cost, then send us the deal for a real view on terms.
Worked example
On a 1.2 million pound industrial unit at 70 percent loan to value, the loan is 840,000 pounds and the deposit is 360,000 pounds. At 7.5 percent over 20 years on capital and interest, the monthly payment is roughly 6,770 pounds. On interest only at the same rate the monthly cost falls to about 5,250 pounds, with the 840,000 pound loan still outstanding at the end.
Commercial mortgage calculator: common questions
How accurate is this commercial mortgage calculator?
It gives a realistic illustration of the monthly repayment on a commercial mortgage from the price, loan to value, rate and term you enter. Real rates on an industrial unit or workshop depend on whether you are buying as an investor or an owner-occupier, the strength of the rent or the trading accounts, the loan to value and the lender, with term rates indicatively from around 6 percent, so treat the result as a guide rather than a quote.
What loan to value can I get on an industrial unit?
Lenders typically advance 65 to 75 percent of the valuation on an industrial unit or workshop, so the deposit is usually 25 to 35 percent of the price. A long lease to a strong tenant, or solid trading accounts if you will occupy the unit yourself, supports the higher end of the range. Set the loan to value in the calculator to model your own deposit.
Should I choose capital and interest or interest only?
Capital and interest repays the loan over the term, so the balance reaches zero and the monthly cost is higher. Interest only keeps the monthly cost down but leaves the full loan outstanding at the end, to be repaid by sale or refinance. Owner-occupiers buying their own premises to hold long term more often amortise; investors planning a refinance or sale sometimes prefer interest only. Toggle between them above to compare.
Want a real commercial mortgage quote?
Send us the unit and the rent or the trading accounts and we will come back with a view on fundability and likely terms within one working day.