Whether you are considering a commercial mortgage to refinance and raise capital, or wish to expand your investment portfolio, choosing your commercial mortgage is a long-term decision.
The Revolution Brokers commercial mortgage calculator helps you instantly compare different mortgage rates and different investment scenarios to help you understand the best course of action.
LTV ratios on commercial properties
One of the most crucial factors in securing a commercial mortgage is the loan to value ratio. This is the comparison of the value of the property and your annual mortgage repayments against the future revenues generated by rental income.
This factor is essential, as many lenders will base their commercial mortgage offers against a capped LTV ratio.
When you complete the commercial mortgage calculator information, be sure to let us know the purchase price of the property, or the valuation if you are mortgaging against existing property. The estimated monthly rental income will help us to calculate the mortgage options available instantly.
Bear in mind that the lower the LTV value, typically the more economical the associated interest rates since the risk to the lender is more moderate.
Interest cover ratios (ICRs) on commercial mortgages
The interest cover ratio (ICR) is another calculation you will come across when considering commercial mortgage rates. This ratio uses the revenue created by your investment compared to the interest incurred over the same period.
Mortgage lenders need to complete an affordability assessment before extending any offers of lending, so this calculation makes sure that your commercial mortgage is affordable.
As an indication, an ICR of two or more is usually considered acceptable. The criteria for ICR vary between lenders, and they may have other measures that are considered more valuable.
Choosing how much to apply for on a commercial mortgage
Our calculator will instantly tell you what level of mortgage offer we anticipate you will be able to secure against your property.
This takes into account several different factors including:
- The purpose of the mortgage - what you are raising finance for.
- What your ICR is - the percentage indicates how the rental revenue compares to the repayment costs. For example, 140% means that your rental income will be to a value of 140% of the mortgage repayments.
- How much the property is going to cost or is valued at.
- What the monthly rental income is expected to be.
How to use the Revolution Brokers commercial mortgage calculator
- Let us know what your borrowing is for. This could be for:
- A property purchase
- To raise capital
- To remortgage without raising capital
- Tell us your anticipated ICR. Options include:
- Personal or company commercial mortgage applications
- Semi-commercial properties - i.e. part commercial and part residential
- HMOs (houses of multiple occupancies) up to six beds or over six beds
- Buy-to-let investment properties
- Enter the cost of the property or the value. If you are unsure, please use an estimated total, although you should be aware that the commercial mortgage options available may vary when the accurate value is known.
- Let us know your anticipated rental income from your property investment.
If the available options do not cover your commercial mortgage needs, please give us a call on 0330 304 3040, and we will be happy to provide a quick indication of your mortgage options.
Once you click the calculate button, you will receive an instant indication as to the value of mortgage we think will be available to you.
For specific commercial mortgage advice and a tailored quote, give Revolution Finance Brokers a call - we work with specialist lenders across the commercial mortgage market to offer outstanding deals and flexible terms.