Commercial Mortgage Calculator

How much can I borrow on a commercial mortgage?

Commercial lenders do not use income multiples. For investment property, affordability is assessed using an Interest Coverage Ratio (ICR): gross rent must cover the annual interest payment by a set multiple. Most lenders require 125% ICR for limited companies and 140% to 145% for personal name borrowers. For trading businesses and owner-occupier premises, lenders use Debt Service Coverage Ratio (DSCR) based on EBITDA or adjusted profit. Select your mode below and enter your figures.

What makes this commercial mortgage calculator different

Most UK commercial mortgage calculators online answer one question: what would my monthly payment be on a loan of £X. Useful if you already know how much you can borrow. Not useful if you are at the start of a decision and the real question is how much income the property or business actually supports.

This calculator handles both. Specifically:

• Three modes, not one. Investment property (ICR on gross rent), trading business or professional practice (DSCR on EBITDA), and a standard repayment calculator. Most free tools offer the third only.
• Stress rate AND product rate inputs. Lenders size the maximum loan at a stressed rate (typically base + 2 to 3%) and quote you a different lower rate as the actual pay rate. The calculator models both: the maximum loan reflects the stress test, the monthly payment reflects what you would actually pay.
• ICR and DSCR options reflecting real lender criteria. 125% for limited company investment, 140 to 145% for personal name, 1.25x to 2.00x DSCR for trading business with thresholds tied to covenant strength and sector risk.
• Interest-only AND capital-and-interest results side by side. Most commercial mortgages run interest-only with the capital repaid via property sale or refinance at term end. The calculator shows both so you can see the difference in maximum loan and monthly cost.
• Gross rent input that matches how lenders assess. Commercial investment lenders do not deduct management costs, voids, or insurance from gross rent like residential BTL does. The calculator uses gross rent directly, which is how the test actually runs.

What this tool is not is a quote. It gives you the loan a property or business should support in the current market. The actual rate and loan a lender will offer depends on their appetite for the sector that month, the specific property, the strength of the tenant covenant, and your borrower profile. The point is to give you the right starting number to test offers against.

Does this business mortgage calculator support DSCR?

Yes. This is a business mortgage calculator with DSCR support built in. The investment mode applies a minimum 125% debt service cover ratio to net rental income, and the trading business mode stresses adjusted EBITDA the way a commercial underwriter would. The maximum loan it returns is the figure a lender’s DSCR test would actually support, not a straight income multiple.

Commercial mortgage repayment calculator

If you already have a loan amount in mind, use this calculator to estimate your monthly payments. It shows both capital and interest (amortising) and interest-only options side by side so you can compare the two structures.

How do commercial mortgage lenders assess affordability?

There is no standard income multiple for commercial mortgages. Every lender has their own DSCR thresholds, stress test rates, and property-specific criteria. What we see consistently across the cases we arrange is that income coverage matters more than LTV on the majority of deals. A strong covenant at modest LTV will almost always get through; a stretched DSCR at low LTV often will not. Nine times out of ten when a deal gets to credit committee, the question is not whether the LTV stacks but whether the income covers stress-tested debt service with a margin for void or rate movement.

Investment property

Commercial investment lenders use an Interest Coverage Ratio (ICR) applied to gross rent. Unlike residential buy-to-let, there is no deduction for management costs, voids, or insurance. The test is simply gross rent divided by the ICR. For limited companies the standard is 125%, meaning gross rent must be at least 125% of the annual interest payment at the stress rate. For personal name borrowers most lenders require 140%, with stricter lenders at 145%. The maximum loan on an interest-only basis is therefore: gross rent ÷ ICR ÷ stress rate.

Trading business and professional practices

For owner-occupier premises, lenders work from EBITDA or adjusted net profit. Most mainstream commercial lenders require 1.50x DSCR for trading businesses. Professional practice lenders (those serving dental, medical, veterinary, legal, and accountancy sectors) often apply more flexible criteria and may incorporate goodwill valuations and professional body membership in their underwriting. On dental and medical practices specifically, we regularly place loans at 80% to 100% of combined property and goodwill value where a generalist commercial lender would have capped at 65%. The practice lenders price for sector knowledge and accept goodwill as collateral in a way mainstream lenders cannot.

LTV caps

DSCR governs how much income can service the debt. LTV governs how much the lender will advance against the property. Both constraints apply and the lower of the two determines the maximum loan. Standard commercial property LTV sits at 65% to 70%. Owner-occupier premises can reach 75% to 80%. Professional practices with strong covenants sometimes achieve 80% to 100% depending on the sector and lender.

Three worked examples using this calculator

The fastest way to see how ICR and DSCR shape maximum borrowing is to run the figures. These three scenarios are typical of cases we place every month.

How do I interpret my calculator result?

The maximum loan figure tells you what your income supports. It does not guarantee a lender will offer it. Three things to read alongside the headline number.

A calculator gives you the ceiling, not the offer. Getting the actual number depends on which lender sees the case, which is what a commercial mortgage broker is for.

Compare the maximum loan to the LTV cap. The calculator gives you the income-derived maximum. The actual loan a lender writes is the lower of that and the LTV-derived maximum (typically 65 to 75% of property value on commercial investment, higher for owner-occupier). If your income supports £2m but 70% LTV on a £2.5m property is only £1.75m, you can borrow £1.75m. The binding constraint changes case by case.

Compare the stress-rate ICR/DSCR to the requirement. If your case sits right on the 1.25x ICR or 1.50x DSCR threshold, you are at the edge of what the lender will accept. Sensible margin is 10 to 15% above the threshold, which gives the underwriter comfort and gives you headroom if income drops a little before completion. Sitting at exactly 1.25x ICR is technically pass-able but flags up at credit committee.

Use the product rate result to test your real cashflow. The maximum loan is sized at the stress rate. Your actual monthly payment will be at the product rate, which is lower. Make sure you can comfortably service the actual payment with margin, because if rates rise during your term the payment moves up with them on a tracker or after refinance on a fix.

What the calculator does not capture is lender-specific overlays: management cost deductions some lenders apply, sector-specific DSCR adjustments, void allowances on multi-let property, or specific covenant requirements. Those are the things a broker can model with you before the application goes in.

Common mistakes we see when borrowers calculate commercial mortgage affordability

Most borrowers who under- or over-estimate their commercial borrowing capacity make one of the same handful of mistakes. None of them are about the headline rate.

• Treating commercial mortgage like a residential income multiple. There is no income multiple in commercial. The test is income coverage of stress-tested debt service. A first-time commercial borrower expecting "I earn £100k, so I can borrow 4x that" will get the answer wrong. Run the ICR or DSCR maths properly.
• Using the product rate instead of the stress rate for sizing. Lenders size the loan at a stressed rate (typically base + 2 to 3%), not at the rate you will pay. Calculating on the product rate over-states the maximum loan by 15 to 25%. Always run with the lender's stress rate.
• Forgetting LTV is the second binding test. Strong income can support a loan size that LTV will not permit. On commercial investment property at 65 to 70% LTV cap, plenty of high-rent cases get capped by the property value rather than by DSCR. Both tests apply, the lower wins.
• Using gross rent that includes service charge or insurance. Lenders test gross rent net of service charge and insurance recoveries. If your headline rent includes those, strip them out before running the calculator. Otherwise the result over-states by 5 to 15%.
• Underestimating sector-specific DSCR overlays. Standard 1.50x DSCR is the mainstream commercial baseline. Lenders applying conservative thresholds (1.75x, 2.00x) exist in hospitality, leisure, secondary retail, single-tenant risk. Picking the wrong threshold gives a wildly different maximum loan.
• Going direct to the existing lender by default. The cases we have placed this year where the borrower's first instinct was to call the existing lender directly almost always priced 20 to 40 basis points sharper through a broker introduction, because the lender knew they were being shopped. Worth running the market on any commercial mortgage above £500k.

Frequently asked questions

How much can I borrow on a commercial mortgage?

It depends on the income, stress rate, and your borrower structure. For investment property on an interest-only basis, the formula is: gross rent ÷ ICR ÷ stress rate. A property generating £100,000 gross rent per year, with a 125% ICR (limited company) and a 7.5% stress rate, supports a maximum interest-only loan of £1,066,667. The same property in personal name at 145% ICR supports £918,000. For trading businesses, affordability is assessed on EBITDA using DSCR, with most lenders requiring 1.50x. Use the calculator above to model your own figures.

What ICR or DSCR do commercial lenders require?

For investment property, lenders use an Interest Coverage Ratio (ICR) on gross rent: 125% is standard for limited companies, 140 to 145% for personal name borrowers. For trading businesses and owner-occupier premises, lenders use Debt Service Coverage Ratio (DSCR) on EBITDA or adjusted net profit: 1.50x is the most common threshold, with some lenders accepting 1.35x for strong covenants. Professional practice lenders may apply sector-specific criteria that differ from both of these benchmarks.

Do commercial lenders stress test at a higher rate?

Yes. Most lenders do not calculate DSCR at the rate you will actually pay. They apply a stressed rate, typically current base rate plus 2 to 3%, to model what happens if rates rise. In 2026 this usually means stress testing at 5.75% to 7% regardless of the actual product rate. This is why the calculator asks you to enter a stress rate separately from the product rate.

Can I get an interest-only commercial mortgage?

Yes, and interest-only is common on commercial transactions. The DSCR test is more straightforward on interest-only because the annual debt service is simply loan amount multiplied by rate, with no amortisation. This means interest-only typically allows a higher maximum loan for the same income, as shown by the results above. Lenders will want a credible capital repayment plan, usually sale of the property or refinance at the end of term.

What is the minimum commercial mortgage at FD Commercial?

Our minimum loan is £250,000. We do not charge a broker fee on commercial mortgages in most cases. We are paid by the lender on completion.

How accurate is this calculator?

The maximum borrowing calculator uses the same DSCR and amortisation logic lenders apply. It will give you a reliable working figure that is accurate enough for forecasting and broker shortlisting, which is how we use it internally. It does not account for lender-specific adjustments to income, void allowances, sector-specific DSCR overlays, or property-type restrictions, which vary between lenders. The repayment calculator is accurate for a standard amortising or interest-only structure at a fixed rate. Actual lender offers depend on full underwriting.

What commercial mortgage rates are available in 2026?

Commercial mortgage rates in 2026 range from approximately 5.5% to 8.5% per annum depending on loan amount, LTV, property type, covenant strength, and lender. Strong covenants at 60 to 65% LTV on good quality investment property with long leases can achieve rates at the lower end of this range. Rates are indicative and change with base rate movements and lender appetite. Call us for current best-rate availability on your specific case.

Why does the calculator separate stress rate from product rate?

Because lenders do. The maximum loan they will write is calculated at the stress rate (the rate they assume if base rate rises). The monthly payment you will actually make is at the product rate (the lower rate currently on offer). The two are typically 1 to 2.5% apart. Mixing them up overstates the maximum loan by 15 to 25%. The calculator runs both correctly so you see the realistic maximum and the realistic monthly cost.

How does the calculator handle professional practice lending?

Use the trading business mode and select the DSCR threshold the practice lender will apply (often 1.35x for dental, medical and veterinary cases rather than the mainstream 1.50x). The maximum loan output will reflect what your income supports. Practice lenders also incorporate goodwill into the security calculation, so the LTV cap is often 80 to 100% of combined property and goodwill value rather than 65 to 75% of property alone. The calculator gives you the income-derived maximum; the practice lender will then size the loan against combined security.

What does the gross rent input exclude?

Gross rent for ICR purposes is the annual rent the tenant pays, before any service charge, insurance recovery or other landlord costs are deducted. Most commercial leases are on FRI (full repairing and insuring) terms, so service charge and insurance are recovered separately from rent. If your lease includes any pass-through items in the headline rent figure, strip them out before running the calculator. The lender's valuer will do the same.

Can I save or export the calculator result?

The calculator displays the result inline on the page. To save it, take a screenshot or use your browser's print-to-PDF function. No data is sent to FD Commercial or stored anywhere unless you contact us directly. If you want a more detailed breakdown including LTV scenarios, sector-specific DSCR, and lender shortlist matched to your case, send the result over by email and we will model it formally.

Do I need a broker if I have used the calculator?

The calculator tells you what a commercial mortgage should support. A broker tells you which lender will actually write the deal at that level and on what terms. The gap between the indicative figure and the rate a borrower can secure varies by lender, sector, security and timing. On commercial deals above £500k the broker route consistently produces tighter pricing than direct application, because lenders have private rate tiers for introduced business that they do not advertise.