Commercial mortgage calculator

How the commercial mortgage calculator works

The calculator takes the property price and your loan to value to work out the loan and the deposit. On capital and interest it then applies the standard amortising repayment formula, so the loan is fully repaid over the term. On interest only it charges interest on the full loan each month and leaves the loan outstanding at the end, to be cleared by sale or refinance.

The capital and interest monthly payment is the loan multiplied by the monthly rate, divided by one minus one plus the monthly rate to the power of minus the number of months. The monthly rate is the annual rate divided by twelve. Interest only is simply the loan multiplied by the annual rate, divided by twelve.

What drives a real rate on a care or supported living mortgage

A lender prices a supported housing mortgage on the lease and the counterparty. The lease length, the indexation mechanism, whether repairs genuinely sit with the provider, and the registered provider's regulatory standing and accounts all feed into the rate, with term loans indicatively from around 5.5 to 6 percent. Loan to value, typically 65 to 75 percent on a strong association lease, sits on top of that. The variable that most often surprises buyers is the valuation basis: where a lender ignores the lease and values the property as an ordinary home, the loan falls accordingly. Use the calculator to model both, then send us the deal for a real view on terms.

Worked example

On a 900,000 pound block of supported living units at 65 percent loan to value, the loan is 585,000 pounds and the deposit is 315,000 pounds. At 6 percent over 20 years on capital and interest, the monthly payment is roughly 4,190 pounds. On interest only at the same rate the monthly cost falls to about 2,930 pounds, with the 585,000 pound loan still outstanding at the end. This is illustrative only and not an offer of finance.