CMB / Calc Suite

Calculators / Repayment Calculator

Commercial Mortgage Repayment Calculator

Monthly payment, total interest and a year-one amortisation snapshot on any UK commercial mortgage. Toggle between capital + interest and interest-only.

InputsRP.01
Annual interest rate6.50%
Term, years20 yrs
Repayment basis
ResultLIVE
Monthly payment · capital + interest
Annual debt service·
Total interest over term·
Total amount repaid·
Year-one capital reduction·
MonthPaymentInterestCapitalBalance

For illustrative purposes only. Not advice.

How to read the result

The monthly payment is the headline number. Total interest is the figure that matters for total cost of finance. Year-one capital reduction is how much of the loan you have actually paid down by the end of the first 12 months. On a 6.5% 20-year capital + interest loan, year-one capital reduction is typically 2.5% of the original balance. On interest-only, it is zero.

The formula

Capital + interest: M = P × r(1+r)n ÷ ((1+r)n − 1)
Interest only: M = P × r

P is the loan amount. r is the monthly rate (annual rate divided by 12). n is the term in months. On interest-only the monthly payment does not amortise capital, so the full loan is owed at the end of the term and must be refinanced or repaid.

Worked example

Owner-occupier, £1m loan, 6.5% over 20 years. Capital + interest monthly payment is £7,456. Annual debt service is £89,478. Over the 20-year term the total amount repaid is £1,789,562, of which £789,562 is interest. Year-one capital reduction is about £25,000.

On interest-only at the same rate, monthly payment drops to £5,417 and annual debt service is £65,000, but the £1m balance is still owed at the end of the term.

Picking term + basis

  • Owner-occupier, 20-25 year capital + interest. Builds equity, lower total cost, higher monthly.
  • Investment, 5-10 year interest-only with refinance. Lower monthly, but the balance must be refinanced or repaid at maturity.
  • Part + part. Some lenders accept part-and-part where a portion of the loan amortises and the rest sits interest-only. Calculator does not model this; use the two basis options to set bounds.

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

How do you calculate a UK commercial mortgage repayment?

On a capital + interest mortgage the monthly payment is calculated using the standard amortisation formula: M equals P times r times (1+r) to the power n, all divided by (1+r) to the power n minus 1, where P is the loan, r is the monthly rate (annual rate divided by 12), and n is the term in months. On interest-only, the monthly payment is simply loan times monthly rate.

What term do UK commercial mortgages run over?

Owner-occupier commercial mortgages typically run 15 to 25 years on capital + interest. Investment commercial mortgages often run 5 to 10 years on interest-only with a balloon at maturity. The amortisation period and the fixed-rate period are separate; a 25-year loan can be on a 5-year fix and then reprice.

Is interest-only or capital + interest cheaper?

Interest-only has a lower monthly payment but a higher total finance cost over the life of the loan because the capital is not reducing. Capital + interest has a higher monthly payment but a lower total cost because each payment reduces the balance. Most investment deals pick interest-only for cash-flow reasons; most owner-occupier deals pick capital + interest to build equity.

What rate should I use in the calculator?

Use the lender's quoted pay rate. For UK commercial mortgages in May 2026, owner-occupier deals price 6.0 to 7.5% per annum, investment commercial 6.5 to 8.5%. The CMB Rate Tracker publishes current ranges by category.

Companion calculators