Mixed-use affordability calculator
Combine your commercial and residential rent and see the maximum loan it supports at the lender's interest cover ratio.
- Combined annual rent£0
- Interest the rent must cover£0
- Maximum loan£0
- Implied monthly interest£0
Indicative only. A loan to value cap (about 70 to 75 percent of value) applies on top, and this is not an offer of finance.
How lenders size a mixed-use loan on rent
On an investment mixed-use property the loan is driven by income, not by your salary. The lender adds the commercial rent and the residential rent to a combined annual figure, then asks how much debt that rent can safely service. The calculator divides the combined rent by the interest cover ratio and the rate to give the largest loan whose annual interest the rent still covers, so on £44,400 of combined rent at a 135 percent ratio and 7.5 percent the supportable loan works out around the figure shown.
What the interest cover ratio does
The interest cover ratio, or ICR, is the headroom a lender keeps between the rent and the interest. At 135 percent the rent has to be 1.35 times the annual interest, which protects the loan against voids, arrears and rate rises. Commercial and mixed-use lenders commonly stress at 125 to 140 percent. Raise the ratio and the supportable loan falls; lower it and the loan rises, which is why two lenders can quote very different amounts on the same property.
From the rent figure to a real loan
The rent sizes one cap; the loan to value sizes the other. The real maximum loan is the lower of the two, so a strong rent on a low value is held back by the loan to value, and a high value on thin rent is held back by affordability. We are a finance arranger and introducer, not a lender. We run both tests, package the commercial and residential income, and place the deal with the lenders whose stress test gives your property the most borrowing.
Mixed-use affordability calculator: common questions
How much mortgage can I get on a mixed-use property?
On an investment deal the loan is sized on the combined commercial and residential rent. Lenders take the annual rent, stress it at an interest cover ratio of commonly 125 to 140 percent, and work out the largest loan whose interest the rent still covers at that cover. The calculator does this for you, then the loan to value cap of about 70 to 75 percent of value is applied on top, and the lower of the two is the maximum loan.
What is an interest cover ratio on a semi-commercial mortgage?
The interest cover ratio is the cushion a lender wants between the rent and the interest. At a 135 percent ratio the combined rent has to be at least 1.35 times the annual interest, so on £67,500 of interest the rent must be at least £91,125. A higher ratio means a smaller loan for the same rent, because the lender is leaving more headroom for voids and rate movement.
Does commercial and residential rent count the same?
Lenders add the commercial rent and the residential rent to a combined figure, but they treat the quality of each differently. A long commercial lease to a strong tenant supports more borrowing than a short or vacant unit, and the residential rent is usually seen as steady underpinning. We package both income streams so the lender sizes the loan on the full picture.
What salary do I need for a semi-commercial mortgage?
For an investment semi-commercial mortgage there is usually no personal salary test in the way a residential mortgage works. The loan is sized on the property's rent at the interest cover ratio, not on your earnings. Owner-occupier deals, where your business trades from the property, are tested on business affordability and debt service cover instead.
Want the real number on your property?
Send us the rent roll and the value, and we will come back with the loan the rent supports and likely terms within one working day.