DSCR and ICR explained: how lenders test affordability on Brighton commercial investment
ICR (interest cover ratio) and DSCR (debt service coverage ratio) are the two affordability tests that determine how much commercial investment mortgage you can raise against a let asset in Brighton. This piece walks through the calculations, the typical Brighton stress rates, and worked examples on a Kemptown shop-with-flat, a Hove office block and an Edward Street Quarter Grade A office investment.
This piece is in preparation.
The outline below is the planned structure for the full piece. Send a topic suggestion or a follow-up question to enquiries@commercialmortgagesbrighton.co.uk and we will work it in.
Coming soon, technical walk-through of ICR and DSCR with Brighton worked examples.
Outline
- ICR formula and typical Brighton cover requirements
- DSCR formula and amortising-basis cover
- Stress rates: how lenders apply them
- Worked example 1: BN2 Kemptown shop-with-flat
- Worked example 2: BN3 Hove multi-let office
- Worked example 3: Edward Street Quarter Grade A office
- The LTV cap versus the affordability cap
- How to optimise: term, fix, structure
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