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Commercial Mortgage Calculator

Our commercial mortgage calculator makes it easier to get to grips with all the metrics involved. Commercial mortgages can be complex, as can verifying whether the charges and total repayments align with your cash flow and business plans.

Property or loan details




Error: Property must be valued at £50,000 or more.

Error: Estimated rental income must be between £1 and £99,999.

Based on your details, you can borrow up to:

£0

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

Our commercial mortgage calculator is a vital financial tool designed to assist investors, business owners, and real estate professionals in evaluating the potential costs and returns associated with financing commercial properties. This online calculator simplifies the process of determining monthly payments, interest rates, loan terms, and overall financing options for various types of commercial real estate, such as office buildings, retail spaces, and industrial properties. By inputting specific variables, you can quickly assess your borrowing capacity and project the financial implications of your investment decisions, enabling you to make informed choices in a complex and competitive market.

What Will Our Commercial Mortgage Calculator Show

Our commercial mortgage calculator provides users with essential financial insights related to commercial property financing. Key outputs of the calculator include:

  • Monthly Payments: The calculator estimates the monthly payment amount based on inputs such as loan amount, interest rate, and loan term. This helps users understand their ongoing financial obligations 
  • Amortization Schedule: It generates an amortization schedule that details how each monthly payment is divided between principal and interest over the life of the loan. This schedule is crucial for understanding the repayment timeline and the total interest paid 
  • Total Financing Costs: Users can also see the total cost of the loan, including interest and any applicable fees, which helps in comparing different financing options.

What You Need To Know Before Applying For A Commercial Mortgage

Applying for a commercial mortgage can be a complex process, and understanding the key factors involved is essential for a successful application. Here are some important considerations:

  • Documentation Requirements: Lenders typically require a variety of documents to assess your financial situation and the viability of your business. Common documents include profit and loss statements, tax returns, personal financial statements, and details about the property you wish to purchase 
  • Financial Health of Your Business: Lenders will closely examine your business's cash flow and financial health. They want to ensure that you can make regular payments on the loan. This includes providing information about any anticipated changes in your revenue or expenses 
  • Down Payment and Loan Terms: Commercial mortgages often require higher down payments compared to residential loans, typically ranging from 20% to 30% of the property's value. Understanding the terms of the loan, including interest rates and repayment schedules, is crucial 
  • Market Conditions and Lender Preferences: The commercial lending landscape can be unpredictable, with lenders frequently changing their focus based on market conditions. It's important to research different lenders and their current lending criteria to find the best fit for your needs 
  • Hidden Costs: Be aware of potential hidden costs associated with the application process, such as appraisal fees, legal fees, and other charges that may arise before the loan is approved or rejected.

FAQs

Which formula is applied when calculating a 30-year mortgage's payments?

Yes, the formula for calculating monthly payments on a 30-year mortgage is essentially the same in the UK as it is in other countries, including the US. The formula is based on the principal loan amount, interest rate, and total payments. The formula is:M=Pr(1+r)N(1+r)N−1M=P(1+r)N−1r(1+r)N?Where:

  • MM = total monthly mortgage payment
  • PP = principal loan amount
  • rr = monthly interest rate (annual interest rate divided by 12)
  • NN = total number of payments (for a 30-year mortgage, this is 30 years × 12 months/year = 360 payments)

In the UK, while the basic calculation remains the same, there may be variations in mortgage products, such as fixed-rate, variable-rate, or tracker mortgages, which can affect the interest rate applied. Additionally, lenders may have different criteria and terms, but the underlying formula for calculating monthly payments remains consistent.

What formula is used to determine principal repayments?

To determine the principal repayments on a loan, you can use the following formula: Principal Repayment=Total Payment−Interest PaymentPrincipal Repayment=Total Payment−Interest PaymentWhere:

  • Total Payment is the fixed amount you pay each period (monthly, for example).
  • Interest Payment is calculated based on the outstanding principal balance and the interest rate for that period.

To calculate the interest payment for a given period, you can use the formula: Interest Payment=Outstanding Principal×rInterest Payment=Outstanding Principal×rWhere:

  • Outstanding Principal is the remaining balance of the loan.
  • R is the periodic interest rate (annual interest rate divided by the number of periods per year).

As you make payments over time, the interest portion of your payment decreases while the principal portion increases. This is since as the outstanding principal decreases, the interest charged on that principal also decreases, allowing more of your payment to go toward reducing the principal balance.

What is the monthly payment amount in the UK for a commercial mortgage of £150,000?

To calculate the monthly payment for a commercial mortgage of £150,000 in the UK, we can use the mortgage payment formula mentioned earlier.  Thus, the estimated monthly payment for a commercial mortgage of £150,000 at a 4% interest rate over 30 years is approximately £716. Keep in mind that the actual monthly payment may vary based on the specific interest rate, loan terms, and any additional fees or insurance associated with the mortgage

How much would a 20-year mortgage cost per month?

To calculate the monthly payment for a 20-year mortgage in the UK, we can use the same mortgage payment formula. Thus, the estimated monthly payment for a £150,000 mortgage at a 5% interest rate over 20 years would be approximately £987.88.

Is it possible to get a commercial mortgage with a bad credit history?

Yes. There are a lot of commercial mortgage lenders available, and some of them accept applications from borrowers with poor credit. These specialized lenders might do further actions, such as the following, to reduce the risk of lending to you:

  • Putting a higher mortgage rate on you
  • Requesting further security from you for the loan
  • Requesting a personal guarantee from the company's directors means that if your business is unable to repay the loan, you will be held personally liable
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Revolution Mortgage Brokers:
100% Independent & Whole-of-Market

As specialist mortgage brokers for a huge variety of applicants, the whole-of-market consultants at Revolution provide access to an exceptional range of lenders, products and mortgage deals. That means you get the advantage of professional negotiation and broker-exclusives through an established lending network to ensure we always find you the most competitive mortgage available.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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