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 care home mortgage on the trading business. Operator EBITDARM, mature occupancy and the fee mix between private and local-authority funding matter as much as the bricks, because the valuation reflects the going concern. On a supported living asset the lender prices the lease instead, looking at the lease length, the indexation and the registered provider covenant. Loan to value against that value, typically 60 to 70 percent, your track record and the asset itself all feed into the rate, with term loans indicatively from around 6 percent. Rates move with the wider market, so we quote them deal by deal. Use the calculator to model the deposit and the monthly cost, then send us the deal for a real view on terms.

Worked example

On a 1.2 million pound care home at 70 percent loan to value, the loan is 840,000 pounds and the deposit is 360,000 pounds. At 7.5 percent over 20 years on capital and interest, the monthly payment is roughly 6,770 pounds. On interest only at the same rate the monthly cost falls to about 5,250 pounds, with the 840,000 pound loan still outstanding at the end. This is illustrative only and not an offer of finance.