Commercial Mortgage Calculator
Calculate UK commercial mortgage payments for 2025/26. See monthly costs for owner-occupied or investment property, total purchase costs including commercial SDLT and fees, and compare renting vs buying commercial premises. BoE base rate 3.75% (March 2026).
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How to Use This Calculator
Mortgage Payment tab
Enter the property value, your target LTV (loan-to-value), the interest rate, and the mortgage term in years. Select whether the mortgage is capital & interest (repayment) or interest-only, and choose owner-occupied or investment to see relevant notes. The calculator shows your monthly payment, total interest, and deposit required.
Total Cost of Purchase tab
Enter the property price and LTV to determine your deposit. Add the arrangement fee percentage, valuation fee, legal fees, and survey costs. The calculator automatically computes commercial SDLT using the 2025/26 non-residential rates (0% up to £150,000, 2% on £150,001–£250,000, 5% above £250,000) and shows the total cash you need to complete the purchase.
Rent vs Buy tab
Enter your current monthly rent alongside the equivalent purchase scenario. The calculator compares monthly costs, calculates the break-even point on your deposit and fees, and shows a 10-year comparison including rent escalation, equity building, and property appreciation. Use this to decide whether buying your commercial premises is financially better than continuing to rent.
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Every input is encoded in the URL. Click Share to send your exact scenario to a broker, accountant, or business partner, or save it for later reference.
The Formula
Commercial mortgage payments use the standard annuity formula for repayment mortgages:
M = P × [r(1+r)^n] / [(1+r)^n − 1]
Where: P = loan amount, r = monthly interest rate (annual rate ÷ 12), n = total months (term × 12)
Monthly interest-only:
M = P × (annual rate ÷ 12)
Capital (P) is repaid in full at the end of the term
Commercial SDLT (non-residential, 2025/26):
£0 – £150,000: 0%
£150,001 – £250,000: 2%
Above £250,000: 5%
Total upfront cost:
Deposit + SDLT + Arrangement fee + Valuation + Legal + Survey
Break-even (rent vs buy):
Break-even months = Total upfront costs ÷ (Monthly rent − Monthly mortgage)
Only applies when mortgage payment is lower than rent
Note: commercial mortgage interest is fully tax-deductible as a business expense. Unlike residential buy-to-let (Section 24), there is no restriction on interest relief for commercial property. The effective after-tax cost of the mortgage is therefore lower than the gross figures shown.
Example
Sarah — business owner buying a £500,000 office in Manchester
Sarah runs a consulting firm currently renting office space at £3,500/month. She is considering buying a £500,000 office unit with a commercial mortgage at 65% LTV and 6.25% interest over 20 years.
Mortgage payment
Total purchase costs
Rent vs buy
Sarah saves £1,121 per month by buying versus renting. Her mortgage interest is fully deductible as a business expense. Over 10 years with 3% annual rent increases and 2% property appreciation, she builds substantial equity while paying less than she would in escalating rent. The break-even on upfront costs comes before the mortgage term ends.