How Much Can You Borrow on a Commercial Mortgage in 2026: Sizing, Serviceability and the Calculator

The commercial mortgage calculator question, how much can I actually borrow, is the one every business owner asks first, and it is the one with the least useful headline answer. A residential borrower gets a rough number from a salary multiple. A commercial borrower does not, because a commercial mortgage is sized off the property, the income and the structure of the deal, not off a single figure. This article explains how a lender actually arrives at your number in 2026, what the calculators can and cannot tell you, and why the honest answer to “how much can I borrow” is usually a conversation rather than a box.

The usual note first. Commercial Mortgages Broker is a trading style of Lenzie Consulting Ltd. We are a broker, not a lender. Commercial mortgages for business purposes are generally not regulated by the Financial Conduct Authority (FCA); where a case is regulated it is referred to an appropriately authorised firm. Rates shown are indicative market bands for 2026, not an offer or a quote. This is a commentary on how commercial borrowing is sized, written to sit alongside a calculator rather than to replace one, and every figure is an indicative band rather than a promise about your case.

Two caps, and the loan is the lower one

A commercial mortgage is sized by two separate tests, and your loan is whichever comes out smaller. The first is loan to value: the most a lender will advance against the property’s worth. On standard commercial mortgages in 2026 that runs up to around 75 percent, with the borrower funding a deposit of 25 percent or more. The second test is serviceability: whether the income can comfortably carry the payments. A calculator that only does the LTV sum, take the value, multiply by 75 percent, is doing half the arithmetic, and usually the easier half.

Loan to value tells you the most a lender will lend against the building. Serviceability tells you the most the income will actually carry. Your loan is the lower of the two, and it is usually serviceability that bites first.

This matters because borrowers routinely anchor on the LTV number, see 75 percent of a purchase price, and plan around it, only to find the income test caps them well below that. On owner-occupier and investment cases alike, it is far more often serviceability than loan to value that decides the maximum. So the first thing to understand about sizing a commercial mortgage is that the property sets the ceiling and the income sets the actual number.

The deposit: 25 percent and why more helps

With maximum loan to value at around 75 percent, the working assumption for a standard commercial mortgage is a deposit of at least 25 percent of the property’s value. That is the floor of the deposit, not a target. Putting in more than 25 percent does two useful things at once. It brings the loan to value down, which sharpens the rate, since a lender advancing 60 percent is taking less risk than one advancing 75 percent and prices accordingly. And it shrinks the loan, which eases the serviceability test, because there is less debt for the income to cover.

A borrower deciding how much deposit to commit is therefore not just meeting a minimum; they are choosing a position on both the price and the affordability of the loan. Where the income is comfortable, a 25 percent deposit and a 75 percent loan may be exactly right. Where the income is tight, adding to the deposit is often the cleanest way to make a deal work that would otherwise fall short on cover. This is the sort of trade-off a commercial mortgage calculator flags but cannot resolve, because it depends on what the borrower is trying to achieve.

Serviceability: interest cover and debt service cover

Serviceability is where commercial sizing genuinely differs from residential, and where the real number is set. Lenders test whether the income covers the loan payments with a margin of safety, and they do it at a stressed rate rather than the pay rate, so the loan still works if rates rise. There are two measures depending on the case.

For a commercial investment property let to a tenant, the lender uses an interest cover ratio, or ICR: the rental income divided by the interest cost at the stressed rate. In 2026 that typically needs to land between 1.25x and 2.00x, meaning the rent must exceed the stressed interest by a quarter to a full margin again, with the higher end applied to weaker or more specialist cases. For an owner-occupier or trading business, the lender uses a debt service cover ratio, or DSCR, testing the business’s operating income against the full loan payment, usually needing 1.25x to 1.65x. In both, the loan is sized down until the cover is met, which is precisely why the income, not the building, so often sets the ceiling.

A worked example of how the number falls out

Take a straightforward commercial investment case to see the two tests interact. Suppose an investor is buying a property valued at one million pounds, let at 70,000 pounds a year in rent. The LTV test says the lender will advance up to 750,000 pounds, 75 percent of value. That is the ceiling. Now the serviceability test. Using an indicative investment rate around the middle of the 2026 band, say 7.5 percent, and applying a stress on top as lenders do, the interest cost on a 750,000 pound loan comfortably exceeds what a 1.25x cover on 70,000 pounds of rent will support. The income test, not the LTV test, is the binding constraint, and the loan is sized down until the rent covers the stressed interest by the required margin.

The number that falls out is the lower of the two caps, and in this case it is set by the rent. Change one input and the answer moves: a higher rent, a lower rate, a larger deposit or a longer term all lift the serviceable loan, while a weaker covenant or a specialist property can tighten the required cover and pull it down. That sensitivity is the whole reason a single headline figure is misleading, and it is why sizing a real commercial mortgage is an exercise in fitting several moving parts together rather than reading one number off a chart.

Term and repayment shape the monthly number

Two more levers change how much a given income will support. The first is the term. Commercial mortgages run up to around twenty-five years, and a longer term spreads the capital repayment over more months, lowering each payment and lifting the loan the income can carry. A shorter term does the reverse. The second is whether the loan is interest-only or on capital and repayment. Interest-only keeps the monthly cost down and can support a larger loan against the same income, but the balance does not fall and has to be repaid or refinanced at the end; repayment chips the balance down over the term but costs more each month. Investment cases more often use interest-only; owner-occupiers more often repay. Neither is right in the abstract, and both change the affordability answer, which is another reason the calculator is a starting point rather than the decision.

What the calculator does, and where it stops

A commercial mortgage calculator is genuinely useful for the first pass. Feed it the property value, a deposit and a rate and it returns an LTV-based maximum and an indicative monthly cost, which is enough to know whether a deal is roughly in range before anyone spends real time on it. That is worth having, and it is why the commercial mortgage calculator on the money site is a sensible place to start scoping a purchase.

Where every calculator stops is the part that actually sets your loan. It does not know your covenant strength, so it cannot judge where in the cover range a lender will pitch you. It does not know how a particular lender treats your property type or your trading history. It cannot tell you which lender, out of a market that sizes the same case differently, will lend most against your income. And it cannot present your case so a lender is comfortable lending toward the top of its range rather than the bottom. Those are the things that move the number by tens of thousands of pounds, and they are exactly what a broker, rather than a form, is for. Use the calculator to see if a deal is plausible; then let a person size it properly.

Interest rate, fees and the monthly payments

A borrowing figure is only half the picture; what a business actually pays each month depends on the interest rate, the term and the fees. Commercial mortgage rates in 2026 sit in an indicative band of 6.0 to 9.0 percent a year, and a commercial mortgage calculator turns that interest rate, the loan and the term into the monthly payments a business can test against its cash flow. Alongside the interest rate sit the fees: an arrangement fee, valuation and legal costs, and sometimes an early repayment charge, and these change the true cost even where the headline rate is the same. Two loans with identical monthly payments can cost different amounts once the fees are counted, which is why the payment a mortgage calculator shows is a starting figure rather than the full cost. A quick pass through the mortgage calculator, then a proper sizing against the trading accounts, is how a borrower moves from a rough number to a figure a lender would actually advance. A commercial mortgage calculator is not the same as a general loan calculator or a business loans tool: it prices a loan secured on property, sized on the income the property or the business produces, against interest rates in the 6.0 to 9.0 percent band, whereas a business loan is unsecured and priced on the trade alone.

Why the market view beats a single lender’s number

Because lenders apply the cover tests and the LTV cap differently, the maximum loan on the same property genuinely varies across the market. One lender caps a specialist property at a conservative loan and a high cover ratio; another, comfortable with the sector, sizes the same case more generously. A borrower who asks only their own bank gets one lender’s answer to “how much can I borrow” and no way of knowing a larger, or cheaper, offer exists elsewhere.

This is where our whole-of-market desk changes the outcome. Placing a case across a panel of more than one hundred lenders means the borrower sees the range of what the market will actually lend on their income and their building, then chooses, rather than accepting a single number. On a clean case with the figures in order, a Decision in Principle typically comes back within 48 hours, so testing the real market number does not have to be slow. Working with a commercial mortgage broker is, in practice, the difference between an estimate and an answer.

The twelve-month view on borrowing

For the rest of 2026, the sizing framework is stable: up to 75 percent LTV, deposits from 25 percent, cover ratios of 1.25x to 2.00x on investment and 1.25x to 1.65x on owner-occupied income, terms up to twenty-five years, all tested at stressed rates built off a 3.75 percent base rate held on 18 June 2026 (Bank of England). With the rate environment steady, the amount a business can borrow is unlikely to swing on the market this year; it will turn on the borrower’s own inputs, the deposit, the income, the property and the structure.

The useful conclusion is the one the calculator hints at but cannot deliver. Your borrowing capacity is not a single figure waiting to be looked up; it is the lower of two caps, sized by your income far more often than by the building, and it varies across the market by more than most borrowers expect. Start with the calculator to see if a deal is in range, then size it properly across the market, because on a commercial mortgage the difference between the two is real money.

FAQ

How much can I borrow on a commercial mortgage in 2026? Up to around 75 percent of the property’s value on a standard case, with a deposit of 25 percent or more, but that loan-to-value figure is only the ceiling. The actual loan is usually set lower by serviceability, the test of whether the income covers the payments at a stressed rate, so the honest answer depends on your income as much as the building’s value.

What deposit do I need? At least 25 percent of the property’s value for a standard commercial mortgage, and often it helps to put in more. A larger deposit lowers the loan to value, which sharpens the rate, and shrinks the loan, which eases the income test, so on a tight case adding to the deposit is frequently the cleanest way to make a deal work.

Why is a calculator’s number different from what a lender offers? A calculator usually does the loan-to-value sum and an indicative payment, which is the easy half. It cannot see your covenant strength, your property type or how a particular lender applies its cover ratios, and those are what actually set the loan. Use a calculator to check a deal is roughly in range, then have the case sized properly.

What is interest cover and why does it cap my loan? Interest cover, or ICR, is rental income divided by the interest cost at a stressed rate, and on investment cases in 2026 it typically needs to reach 1.25x to 2.00x. If the rent will not cover the stressed interest by that margin, the lender sizes the loan down until it does, which is why income, not property value, so often sets the maximum. Owner-occupier cases use a similar debt service cover test of 1.25x to 1.65x.

Talk to us

If you want a real answer to how much you can borrow rather than an LTV estimate, the useful step is to size the actual case, income and all, across the market. You can start with a quick calculator to see whether a deal is in range, then speak to a commercial mortgage broker about what the market will genuinely lend on it.

All figures in this article are indicative market bands for UK commercial mortgages in 2026, not an offer, a quote or a financial promotion, and any facility is subject to lender terms, valuation and full due diligence. This article was written by Matt Lenzie.