Commercial Mortgage Calculator — How Much Can You Actually Borrow?

A commercial mortgage calculator (also called a business mortgage calculator) estimates what you can borrow against commercial property — a shop, office, warehouse, industrial unit, pub, surgery, care home or mixed-use building — and what that borrowing costs.

Most of the calculators you'll find only do half the job. You type in a loan amount, a rate and a term, and they hand back a monthly payment. That's useful after a lender has told you how much they'll lend. It's useless at the point most people are actually at, which is: can this deal even be financed, and at what level?

This tool works the way a commercial underwriter works. It sizes the loan from your income — rent for a let investment, EBITDA for a business that trades from the building — applies the stress rate, caps it at the maximum LTV, then layers in the arrangement, valuation and legal fees so you can see the cash you actually need to complete.

Forget income multiples. A commercial underwriter builds two separate ceilings and lends you the lower one.

Ceiling 1 — the LTV cap. A simple percentage of the property's value, typically 65% to 75% depending on the asset. Trading businesses like pubs, hotels and care homes are usually capped lower, around 60% to 70% of bricks-and-mortar value.

Ceiling 2 — the income test. The income the property or business produces must cover the debt at a stressed interest rate, by a set margin. Investment property uses ICR against gross rent; owner-occupied premises use DSCR against business profit.

Here's the part most borrowers get wrong: on the majority of commercial deals, it's the income test that binds, not the LTV. A £2m building with thin rent can support less debt than a £1.4m building on a long lease to a strong tenant. Plenty of deals stack comfortably on LTV and still get declined because the coverage isn't there at the stress rate.

The calculator above draws both ceilings side by side and marks which one is binding — so you know whether the fix is more deposit, or more income.

If the building is let to a third-party tenant and the rent services the debt, the lender applies an Interest Coverage Ratio. Gross rent must exceed the annual interest at the stress rate by a set percentage.

The ICR you're given depends mainly on how you hold the property. A limited company or SPV is typically tested at 125%. Buying in a personal name usually pushes it to 140%–145%, because the lender is also modelling your personal tax position. Weaker covenants, short unexpired lease terms or secondary locations can push it higher still.

Unlike residential buy-to-let, commercial ICR is generally applied to gross rent — there's no standard deduction for voids, management or insurance before the test. That doesn't mean those costs vanish; it means they come out of your margin, not the lender's calculation. Compare the residential approach on our buy to let mortgage calculator.

If your own business trades from the building — a workshop, a dental practice, a restaurant, a nursery, a warehouse — there is no rent. The lender looks at the business instead, using EBITDA (earnings before interest, tax, depreciation and amortisation) or an adjusted net profit figure, and applies a Debt Service Coverage Ratio.

The critical difference from ICR: DSCR counts the full debt service including capital repayment, not just interest. That makes it a materially tougher test — and it's why switching to interest-only can lift the maximum loan so sharply on an owner-occupied deal.

1.25× is roughly the floor across the market. High street banks tend to want 1.30× or more. 1.50× is the most commonly quoted requirement for trading businesses, and some lenders push volatile sectors or weaker covenants as high as 1.80×.

Most lenders want two to three years of filed accounts. A start-up can still borrow, but expect a bigger deposit, a proper business plan and probably personal guarantees.

This trips up almost every first-time commercial borrower. The rate that sizes your loan is not the rate you pay.

Lenders size the maximum facility at a stress rate — a deliberately higher rate that models what happens if the market moves against you. It's typically the Bank of England base rate plus a margin of around 2%–3%, subject to a floor. With base rate around 3.75% in 2026, most commercial deals are being stressed somewhere in the 6%–8% range, and high street banks tend to sit at the top of that.

Your pay rate — the product rate you actually service each month — is usually lower. So the calculator uses the stress rate to work out the ceiling, and the pay rate to work out your monthly payment. Two different numbers, two different jobs.

One practical note: on fixed-rate products some lenders will stress at the fixed rate itself rather than a notional floor, which can meaningfully improve coverage on a marginal deal. That's a conversation worth having with a broker before you pick a product.

Remember that if you add the arrangement fee to the loan, the LTV is measured on the gross facility — the fee counts. Adding a 2% fee to a 75% LTV loan can quietly push you over the cap, and the lender will size down rather than breach it. The calculator handles this for you.

Five-year fixes tend to price a little above two-year fixes. High street banks offer the sharpest rates but have the narrowest risk appetite; challenger and specialist lenders price higher and take more. That trade-off — rate versus appetite — is the entire game on a marginal deal.

Commercial fees are heavier than residential and they land differently. The one that catches people out is the distinction between the gross facility (what you owe and pay interest on) and the net advance (what actually lands in the solicitor's account).

Lender arrangement fee — typically 1%–2%

Charged as a percentage of the facility. Usually it can be added to the loan, which is convenient — but you then pay interest on it for the whole term, and it counts towards your LTV. Adding it means your net advance is smaller than your loan, so you need a slightly bigger deposit.

Valuation fee

Commercial valuations are far more involved than residential ones and priced accordingly. Expect four figures on most deals, more on complex or trading assets. Usually payable once you have an offer in principle.

Legal fees — both sides

You normally pay your own solicitor and the lender's. Budget accordingly; this is a real cost that most calculators simply ignore.

Broker fee and exit costs

Some brokers charge, many don't on commercial (they're paid by the lender). Watch for early repayment charges and exit fees if you might refinance or sell inside a fixed period.

The calculator adds all of this up and shows you the single number that matters: the cash you need on the day of completion.

If your coverage is marginal, switching to interest-only is one of the most effective levers available — often more powerful than shaving the rate. Extending the term does something similar on a capital-and-interest deal: lower annual service, better coverage, but more total interest paid.

A semi-commercial property has both commercial and residential parts — the classic shop with a flat above, or a pub with living accommodation. Lenders generally treat it as commercial where the commercial element is the majority of the floor area or rental value.

Approaches differ. Some lenders blend all the income into one figure and run a single coverage test — typically ICR on the combined gross rent from both elements, at 125% for limited company ownership or around 140% in a personal name. Others split it, applying commercial criteria to the shop and buy-to-let criteria to the flat, then combine. Which route you take can change the loan meaningfully, which is exactly the sort of thing a specialist broker earns their keep on.

One quirk worth knowing: several semi-commercial lenders stress variable-rate products at a notional rate around 8% — roughly 425 basis points above the current base rate — rather than a fixed margin. This wider gap between the pay rate and the stress rate is a big reason semi-commercial deals are so often income-constrained rather than LTV-constrained at today's values.

LTVs are usually a little friendlier than pure commercial — often 70% to 75%. If the residential portion dominates, you may be looking at a buy-to-let product instead: try the buy to let mortgage calculator.

1. Investment — retail unit, limited company, income binds

A £1.2m freehold retail unit on a long lease to a national tenant, producing £80,000 gross rent. Held in an SPV, so ICR is 125%. Stress rate 7.5%, interest-only.

The income test gives £80,000 ÷ 1.25 ÷ 0.075 = about £853,000. The 70% LTV cap gives £840,000. Here the two are close, and the LTV binds by a whisker — the rent would actually support slightly more. Buy the same unit in a personal name at 145% ICR and the income ceiling drops to roughly £735,000, and now income binds hard: the same building, £105,000 less debt.

2. Owner-occupied — the DSCR squeeze

A manufacturer buying its own £900,000 unit, EBITDA £220,000, DSCR required 1.50×, stress 7.5%, 20-year term.

On capital & interest, annual debt service per £1m borrowed at 7.5% over 20 years is roughly £96,600 — so the maximum service EBITDA supports (£220,000 ÷ 1.5 = £146,700) sizes a loan of about £1.52m, comfortably above the 70% LTV cap of £630,000. LTV binds. Now halve the EBITDA to £110,000 and the income ceiling falls to roughly £760,000 — still above the cap. Halve it again and suddenly income is the constraint. This is why the calculator draws both bars: you need to see which one is close.

3. Fees — the deposit you didn't budget for

On an £840,000 facility with a 1.5% arrangement fee added to the loan, the fee is £12,600 — so your net advance is only £827,400. On a £1.2m purchase, your deposit isn't £360,000; it's £372,600. Add a £2,500 valuation and £4,000 of legal fees and you need £379,100 in cash on completion day. That £19,100 gap is exactly what a payment-only calculator never tells you.

Official sources & further reading: track the Bank of England base rate that drives commercial stress rates, check non-residential SDLT rates on GOV.UK before you budget, and verify any adviser on the FCA register. Browse every tool on the mortgage calculators homepage.