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ICR Calculator

Stressed annual rent divided by stressed annual interest. The investment-property cover ratio. UK lenders typically want 140% to 175% depending on sector and LTV.

InputsICR.01
Stressed interest rate, annual7.50%
Lender ICR threshold150%
ResultLIVE
Interest Cover Ratio · stressed rent ÷ stressed interest
Stressed annual interest·
Rent required at threshold·
Rent surplus / (gap)·
Max loan at threshold·
Pending input
Enter rent, loan and stressed rate to see whether ICR clears.

For illustrative purposes only. Not advice.

How to read the result

  • 175% and above · comfortable. Prime industrial or prime office typically lands here.
  • 150 to 174% · standard range. Most UK investment commercial mortgages on mid-market stock clear at this level.
  • 140 to 149% · tight. Workable on prime assets with strong covenant; harder on secondary stock.
  • Below 140% · expect a reduced LTV cap, higher pricing, or a covenant-specialist lender.

The formula

ICR = (Stressed Annual Rent ÷ Stressed Annual Interest) × 100

Stressed annual interest is loan amount multiplied by the lender's stressed rate. Most UK commercial lenders stress the pay rate by 1% to 2%, so a 5-year fix at 6.5% pay rate is typically stressed at 7.5% to 8.5% for ICR purposes. Stressed rent is gross rent with voids, management, repairs and ground rent or service charge shortfalls deducted.

Worked example

Multi-let industrial estate, M62 corridor. Gross contracted rent £165,000. After 5% void, 8% management and ground rent, stressed rent is £140,000. Loan £1.5m at 6.5% pay rate, stressed at 7.5%. Stressed interest is £1,500,000 × 7.5% = £112,500.

ICR is £140,000 ÷ £112,500 = 124%. Below the typical 150% threshold. The lender will either cut loan size to bring stressed interest below £93,333 (which clears 150%) or step away.

Sector ICR norms

Lenders vary their ICR threshold by sector because vacancy risk varies. The market 2026 norms we see are:

  • Prime industrial / logistics · 140 to 145%.
  • Prime office, single covenant · 140 to 150%.
  • Multi-let industrial · 145 to 155%.
  • Mixed-use / semi-commercial · 150 to 160%.
  • Secondary office · 160 to 170%.
  • Retail high street · 165 to 175%.
  • Leisure / specialist · 175%+.

Reminder. For illustrative purposes only. These calculators are educational. They are not advice. Actual lender pricing and underwriting decisions depend on covenant, LTV, sector, property condition and dozens of factors a calculator does not see. Always validate with a regulated advisor before committing to finance.

Frequently asked

What ICR do UK commercial mortgage lenders require?

On investment commercial mortgages, lenders typically want 140% to 175% on a stressed interest rate. Prime industrial and prime office get the lighter end. Secondary retail and leisure get the heavier end. The stress rate is usually pay rate plus 1% to 2%.

How is ICR calculated for a commercial mortgage?

ICR equals stressed annual rental income divided by stressed annual interest, expressed as a percentage. Stressed rent is gross rent less voids, management, repairs and ground rent or service charge shortfalls. Stressed interest is loan amount multiplied by the lender's stressed rate.

What is the difference between ICR and DSCR?

ICR uses interest only and is the standard cover ratio on UK investment commercial property. DSCR uses total debt service (capital plus interest where amortising) and is the standard on owner-occupier and trading-business commercial mortgages. Both ask whether the property or business clears the loan cost, just on different numerators.

What stress rate do lenders use for ICR?

Most UK lenders stress the pay rate by 1% to 2%. On a 5-year fix at 6.5% pay rate, lenders typically run ICR at 7.5% to 8.5% stress. On variable-rate or shorter fixes, the stress add-on can be larger because there is more refinancing risk.

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