Commercial mortgage calculator UK

Many factors can affect the monthly payments for a commercial mortgage. These are some of the most important ones:

• Loan amount: The amount of the loan will affect the monthly payment. The bigger the loan, the higher the monthly payment.
• Interest rate: The interest rate is the cost of borrowing money, and it can significantly impact the monthly payment. Low interest rates generate lower monthly payments. High interest rates create higher monthly payments.
• Loan term: The length of the loan term, or the duration of the loan, will affect the monthly payment. Because a longer loan term means the debt is spread across more years, you’ll pay a smaller sum per month. 
• Amortisation schedule: The amortisation schedule is the breakdown of the principal and interest payments over the life of the loan. Many commercial mortgages only repay interest for the first few years of the term, with repayments of principal coming later. This is known as a long amortisation schedule, and it results in lower monthly payments but over a longer period. In contrast, a shorter amortisation schedule pays the principal back sooner, which results in higher monthly payments.

It isn’t just about the mortgage. As well as adjusting for the variables above, you’ll need to take the following additional costs into account when calculating loan affordability:

• Property taxes: Property taxes are a significant expense for commercial properties. The higher the taxes, the higher the monthly payment.
• Insurance costs: If you’re taking out a mortgage to buy the property, the lender will demand that you insure the premises against loss by fire, flood and other risks. Depending on the type of property you buy and where it is located will determine the monthly cost of the insurance policy.
• Other expenses: Routine and emergency expenses such as maintenance costs, repairs, and management fees can also affect your total monthly payment.