How to Use the OBR Calculator

1. Sign up – Just an email address and password. No onboarding forms or sales calls.
2. Enter inputs – Company profile, lease details, and financial metrics. Each field has clear guidance.
3. Download your OBR – Instant results with a professional PDF report for your audit file.

These fields determine your entity's credit risk profile and sector-specific adjustments.

Sector

What to enter: Select the industry that best describes your primary trading activity.

• Examples: Retail, Manufacturing, Construction, Professional Services, Hospitality, Healthcare, Technology.
• If diversified: Choose the segment that generates most revenue (e.g., if you're 60% manufacturing, 40% wholesale, choose Manufacturing).
• Why it matters: Some sectors (e.g., construction, hospitality) are considered higher risk by lenders and carry higher spreads.

Credit size band

Nothing to enter. Lease Rater derives this from the turnover you give, using its own fixed cut-offs.

You don't enter this. Lease Rater works it out from the turnover you type, and nothing else.

• Micro: turnover up to £632k
• Small: over £632k, up to £10.2m
• Medium: over £10.2m, up to £36m
• Large: over £36m
• These are Lease Rater's own credit cut-offs. They are not the statutory limits, and they do not change when the law does.
• Why it matters: smaller businesses generally face higher borrowing costs, from a shorter track record and thinner financial resources.

Companies Act size categories (for reference only)

These are a different thing, and Lease Rater does not price from them. For financial years beginning on or after 6 April 2025 a company falls into a category if it meets at least two of three conditions:

• Micro: turnover ≤£1m, balance sheet total ≤£500k, ≤10 employees
• Small: ≤£15m, ≤£7.5m, ≤50 employees
• Medium: ≤£54m, ≤£27m, ≤250 employees

Those categories decide what you must file and whether you need an audit. Because they are a two-of-three test and use different figures, your credit size band can differ from the size shown on your accounts. That is expected, and neither is wrong.

Credit Rating

What to enter: External credit rating band if you have one (A, BBB, BB, B, CCC). If unrated, select NR.

• Most SMEs are NR (Not Rated). Only companies with formal ratings from agencies like Moody's, S&P, or Fitch should select a specific band.
• Don't guess: If unsure, choose NR. The OBR calculation uses your financial metrics to assess creditworthiness instead.
• Why it matters: Rated companies may receive a modest credit spread reduction; unrated companies rely on financial ratio analysis.

Years Trading

What to enter: Full years the entity has been trading (not dormant or in formation).

• Example 1: Incorporated 18 months ago, trading for 15 months → enter 1.
• Example 2: Established 8 years ago → enter 8.
• Start-ups (≤2 years): May face a "new business" premium reflecting higher risk of failure.
• Leave blank if: You don't have this information it's optional and has modest impact.

These fields describe the lease structure, asset type, and security arrangements.

Asset Class

What to enter: The type of asset being leased.

• Property: Office, warehouse, retail premises, industrial units.
• Vehicles: Cars, vans, trucks, buses, plant machinery (mobile).
• Equipment: Manufacturing machinery, construction equipment, medical devices.
• IT: Servers, computers, telecoms equipment, software licenses (if capitalised).
• Note: Asset class describes what you are leasing. It does not decide the security answer below, because the obtainable borrowing rate is about money you would borrow, not about the asset you lease.

Security Type

What to enter: The security your bank would require if it lent you this money. This is the question most often answered the wrong way round, so it is worth a moment.

The question is not what security the lease carries. FRS 102 defines the obtainable borrowing rate as the rate you would pay to borrow, over a similar term, an amount similar to the total of the lease payments. Unlike the incremental borrowing rate under IFRS 16, that definition makes no reference to security at all. So you are not describing your landlord's position or the finance company's title to a vehicle. You are answering a different question:

If I asked my bank today to lend me the total of these lease payments, over this term, what security would they want?

• Debenture (fixed and floating charges): choose this if the borrowing would most likely come from a high-street bank, which would normally take a debenture over the business.
• Fixed charge over a specific asset: choose this only if a specific asset would be charged to the lender. It must be an asset the entity owns; you cannot give a fixed charge over premises you lease.
• Unsecured, with no debenture or guarantee: choose this if the borrowing would more likely come from an alternative or higher-risk lender, or if the business could not or would not give security.

If you are not sure: most trading SMEs borrowing a sum of this size would be asked for a debenture, so that is the usual answer. Pick the option that matches what your bank would actually require, and keep a note of why you chose it. That note is the evidence an auditor will ask for.

Why it matters: better security produces a lower rate. Choosing unsecured when your bank would in fact take a debenture overstates your rate, and so overstates your lease liability.

Payment Profile

What to enter: How often you pay and when (advance vs arrears).

• In Advance vs In Arrears: "In advance" means payment is due at the start of the period (e.g., 1 Jan for January, 1 Apr for Q2). "In arrears" means payment is due at the end of the period (e.g., 31 Jan for January, 30 Jun for Q2).
• Monthly in Advance: Pay at the start of each month (e.g., January payment made 1 Jan). This is the most common structure for asset finance, equipment leases, and hire purchase agreements (70%+ of UK asset finance).
• Monthly in Arrears: Pay at the end of each month (e.g., January payment made 31 Jan or early Feb). Less common overall (20-30% of asset finance), but used in some equipment and vehicle leases.
• Quarterly in Advance: Pay at the start of each quarter (1 Jan, 1 Apr, 1 Jul, 1 Oct). This is the UK standard for commercial property leases (60-70% of UK property leases) and required by most institutional landlords.
• When to use each option:
  • Property leases: Almost always quarterly in advance (UK market standard).
  • Asset finance/equipment/HP: Usually monthly in advance, sometimes monthly in arrears.
  • Vehicle leases: Typically monthly in advance.
• Check your lease agreement: Look for "payable in advance" or "payable in arrears." If the lease doesn't specify, quarterly in advance is the safe assumption for property; monthly in advance for equipment/vehicles.
• Why it matters: Payment timing affects the present value (PV) calculation. Paying at the start of each period gives a slightly higher present value, and so a slightly higher lease liability, because each payment is discounted over a shorter time. There is also a small spread adjustment. Three profiles are offered. Monthly in advance scores best, monthly in arrears is neutral, and quarterly in advance scores worst. Quarterly in arrears is not offered.

Lease Term (Years)

What to enter: Total lease duration from commencement to expiry (or first break clause if reasonably certain to break).

• Examples: 5-year property lease → 5. 3.5-year vehicle lease → 3.5.
• Use decimals for months: 2 years 6 months = 2.5. 4 years 3 months = 4.25.
• Renewal options: Include only if reasonably certain to exercise (e.g., penalty for not renewing, critical location). Otherwise use initial term only.
• Why it matters: Longer terms = higher rates (more risk, longer lock-in). Term affects base rate tenor selection.

Annual Lease Payments (£)

What to enter: Total you pay per year, excluding VAT.

• Example 1: £5,000/month + VAT → annual = 60000 (5,000 × 12).
• Example 2: £12,000/quarter + VAT → annual = 48000 (12,000 × 4).
• Always ex-VAT: Don't include the VAT amount. Check your invoice or lease schedule for the "net" figure.
• Service charges: Include if they're part of the lease liability (i.e., contractual and unavoidable). Exclude variable charges like utilities.
• Why it matters: Used to calculate exposure (PV) if you don't provide it manually. Higher rent = higher exposure = potentially higher spread.

Residual / Balloon % (Optional)

What to enter: Final balloon payment or guaranteed residual value, as a percentage of the original asset cost.

• Example: £100k vehicle, £20k balloon at end → enter 20.
• When to use: Mainly for vehicle HP, asset finance with residual guarantees, or PCP-style structures.
• Property leases: Typically leave blank (no balloon).
• Impact: Higher balloons increase risk (you're deferring repayment), which can add to the spread.
• Leave blank if: No balloon or residual payment applies.

Rent Deposit Months (Optional)

What to enter: Number of months' rent held as a deposit (property leases only).

• Example: 3 months' rent (£15k) held as deposit → enter 3.
• Common practice: UK commercial leases often require 3-6 months' rent deposit.
• Impact: Provides modest security to landlord; marginally reduces risk and spread.
• Leave blank if: No deposit or not a property lease.

Exposure Override (£, Optional)

What to enter: Total lease exposure if you've already calculated the present value (PV) of future lease payments.

• When to use: You have a specific PV figure from your accountant or finance team (e.g., they've already discounted lease payments at a provisional rate).
• Most users leave blank: Lease Rater will calculate PV automatically from annual rent, term, payment profile, and a provisional OBR (see detailed section below).
• Example: You've calculated PV = £250,000 using a 5% discount rate → enter 250000.
• Why override? If you want to force a specific exposure for sensitivity analysis or to match an existing accounting treatment.

These fields build a picture of your company's financial health and creditworthiness. Use your latest filed accounts or most recent management accounts.

General Tips for Financials

• Use full-year figures: 12-month period (not half-year or quarterly).
• Consistency: All figures should come from the same period (e.g., all FYE 31 Dec 2025).
• Parent vs subsidiary: Use the entity that will hold the lease. If it's a subsidiary but parent-guaranteed, consider using group figures (consult your accountant).
• Negative numbers: Allowed for EBITDA, EBIT, TNW. Enter negative sign (e.g., -45000 for £45k loss).

What Metrics Are Calculated from Your Inputs

Lease Rater calculates 14 industry-standard financial metrics from your inputs:

Profitability Metrics

• EBITDA Margin: (EBITDA / Revenue) × 100
• EBIT Margin: (EBIT / Revenue) × 100
• Return on Equity (ROE): (Net Income / TNW) × 100

Liquidity Metrics

• Current Ratio: Current Assets / Current Liabilities
• Quick Ratio: (Current Assets - Inventory) / Current Liabilities
• Cash Ratio: Cash / Current Liabilities

Leverage Metrics

• Total Debt / TNW: Total Debt / Tangible Net Worth
• Total Debt / EBITDA: Total Debt / EBITDA (years to repay)
• Net Debt / EBITDA: (Total Debt - Cash) / EBITDA

Coverage Metrics

• Interest Coverage Ratio (ICR): EBIT / Interest Expense
• Fixed Charge Coverage (FCC): EBITDA / (Interest + Capex)

Cash Flow Metrics

• Free Cash Flow (FCF): EBITDA - Interest - Tax - Capex
• FCF / Total Debt Ratio: FCF / Total Debt (debt repayment capacity)

Balance Sheet Strength

• Cash Buffer: Cash / Total Debt (liquidity cushion)

Each metric is scored using 6 risk bands: Excellent, Strong, Satisfactory, Fair, Weak, Vulnerable. Your PDF report shows which band you fall into for each metric.

Revenue (£)

What to enter: Total turnover / revenue for the year.

• Where to find: P&L, first line, typically labelled "Turnover" or "Revenue."
• Example: £3,250,000 → enter 3250000.
• Don't: Deduct cost of sales. We want the top-line figure.

EBITDA (£)

What to enter: Earnings before interest, tax, depreciation, and amortisation.

• If reported: Look for "EBITDA" or "Adjusted EBITDA" in management accounts.
• If not reported: Calculate: EBITDA = EBIT + Depreciation + Amortisation.
• Example: EBIT £200k, Depreciation £50k, Amortisation £10k → EBITDA = 260000.
• Negative EBITDA? Enter negative number (e.g., -50000 for £50k loss).
• Why it matters: EBITDA is used in 6 different metrics:
  • EBITDA Margin (profitability)
  • Total Debt/EBITDA and Net Debt/EBITDA (leverage)
  • Fixed Charge Coverage (coverage)
  • Free Cash Flow (cash flow)
  • Exposure ratios (loan-to-EBITDA)

EBIT (£)

What to enter: Operating profit (after depreciation and amortisation, before interest and tax).

• Where to find: P&L- typically labelled "Operating Profit" or "Profit from Operations."
• Example: Operating profit £180k → enter 180000.
• Why needed? Used to calculate interest cover ratio (EBIT / Interest Expense).

Interest Expense (£)

What to enter: Total finance costs for the year.

• Where to find: P&L- "Finance Costs" or "Interest Payable" line.
• Include: Bank loan interest, overdraft interest, HP interest, lease interest (under old rules).
• Exclude: Interest receivable/income (we want gross interest paid, not net).
• Example: £25,000 interest expense → enter 25000.
• Zero interest? Enter 0 if your company has no borrowings. The system will handle this gracefully.

Total Debt (£)

What to enter: All interest-bearing borrowings (current + non-current).

• Include: Bank loans- overdrafts (if drawn), hire purchase, finance leases, shareholder loans (if interest-bearing).
• Exclude: Trade creditors, accruals, deferred tax, non-interest-bearing shareholder loans.
• Where to find: Balance sheet- sum of "Bank Loans" + "Hire Purchase" + "Finance Leases" (current + non-current portions).
• Example: £150k term loan + £30k HP = 180000.
• Important: Don't include the NEW lease you're calculating an OBR for. Use existing debt only.

Cash & Equivalents (£)

What to enter: Cash at bank plus short-term liquid investments.

• Where to find: Balance sheet- "Cash at Bank" or "Cash and Cash Equivalents."
• Include: Current account balances, short-term deposits (≤3 months).
• Exclude: Restricted cash, term deposits >3 months.
• Example: £45,000 in bank accounts → enter 45000.

Current Assets (£)

What to enter: Total current assets from the balance sheet.

• Where to find: Balance sheet- "Current Assets" total.
• Includes: Cash, receivables (debtors), inventory (stock), prepayments.
• Example: Current assets total £320,000 → enter 320000.

Current Liabilities (£)

What to enter: Total current liabilities from the balance sheet.

• Where to find: Balance sheet- "Current Liabilities" total.
• Includes: Trade creditors, accruals, current portion of loans, VAT payable, PAYE/NI payable.
• Example: Current liabilities total £180,000 → enter 180000.
• Why it matters: Used to calculate current ratio and working capital position.

Inventory (£)

What to enter: Value of stock held at year-end.

• Where to find: Balance sheet- "Stock" or "Inventories."
• Example: Stock £85,000 → enter 85000.
• Service companies: Enter 0 if no stock held (e.g., consultancies, professional services).
• Why needed? Used to calculate quick ratio (current assets - inventory) / current liabilities.

Tangible Net Worth (TNW, £)

What to enter: Share capital + reserves - intangible assets.

• Formula: TNW = Total Equity - Intangible Assets - Goodwill.
• Where to find: Balance sheet- take "Total Equity" then subtract "Intangible Assets" and "Goodwill" if present.
• Example: Equity £500k, Goodwill £80k → TNW = 420000.
• Negative TNW? If company has net liabilities, enter negative (e.g., -50000). This significantly increases credit risk.
• Why it matters: Used to calculate leverage ratio (Total Debt / TNW). Key solvency metric.

Depreciation (£, Optional)

What to enter: Annual depreciation charge.

• Where to find: P&L notes - depreciation charge for the year.
• When estimated: If you don't provide depreciation AND don't provide capex, Lease Rater estimates capex at 3% of revenue. Providing depreciation gives a better estimate (capex ≈ depreciation for steady-state businesses).
• Impact: Used to derive EBIT (if not provided directly) and to estimate capex for Fixed Charge Coverage and Free Cash Flow calculations.
• Leave blank if: You've already provided EBIT and capex directly - depreciation not needed in this case.

Capex (£, Optional)

What to enter: Capital expenditure - cash spent on fixed assets during the year.

• Where to find: Cash flow statement - "Purchase of tangible fixed assets" or "Capital expenditure".
• Why optional? If not provided, Lease Rater estimates using industry-standard methods:
  • Primary method: Uses depreciation as proxy (maintenance capex ≈ depreciation)
  • Fallback method: Uses 3% of revenue (UK SME industry average)
• Impact: Used in Fixed Charge Coverage (EBITDA / (Interest + Capex)) and Free Cash Flow (EBITDA - Interest - Tax - Capex). Without capex, these metrics would be overstated.
• When to override: If your business has unusually high or low capex needs (e.g., growth phase with major investments, or asset-light services).
• Estimation flags: PDF report shows "(Capex estimated)" if we used an estimate, ensuring transparency.

Tax Paid (£, Optional)

What to enter: Corporation tax actually paid during the year (cash basis).

• Where to find: Cash flow statement - "Tax paid" line.
• Why optional? If not provided, Lease Rater estimates at 19% of EBIT (UK corporation tax rate).
• Impact: Used in Free Cash Flow calculation (EBITDA - Interest - Tax - Capex).
• When to override: If you have actual tax paid figures (more accurate than estimates), or if you have losses carried forward (tax paid = £0).
• Estimation flags: PDF report shows "(Tax estimated)" if we used an estimate.

This is the most technical part of the OBR process. If you leave Exposure Override blank, Lease Rater calculates the present value (PV) of your lease payments automatically. Here's how it works:

The Challenge: Circular Dependency

To calculate the OBR, we need to know the lease exposure (PV). But to calculate PV, we need to discount future payments using... the OBR. Classic circular reference!

The Solution: Iterative Convergence

Lease Rater solves the two together by iterating:

1. Pass 1: discount the lease payments at the term-matched SONIA base rate to get a first present value, then score the OBR using that figure as the exposure.
2. Pass 2 onwards: re-discount the payments at the rate the previous pass produced, and re-score the OBR on the new present value.
3. Convergence: the loop stops when the rate stops moving, meaning a change of less than 0.05 of a basis point between passes. The test is on the rate alone.
4. Safety limit: a maximum of 8 passes. In practice it settles in 2 or 3.
5. Where it cannot settle: the exposure pillar scores the present value into bands, so occasionally a band boundary sits between two candidate rates and the calculation alternates between them rather than settling. Where that happens the report says so, and the lower of the two rates is used, which gives the higher lease liability. This affects well under one per cent of calculations. The two candidate rates sit around a tenth of a percentage point apart, which on a short lease is a difference in the liability of roughly 0.1 per cent.
6. Final step: the lease liability is then discounted at the final rate, the one printed on the report. So the rate and the liability shown to you always belong together, and re-performing the calculation from the reported rate reproduces the reported liability.

How the payments are discounted

The OBR is a nominal annual rate compounded monthly, so every contractual payment is discounted from the month in which it falls:

PV = Σ payment ÷ (1 + OBR ÷ 12)^m

Where:

• payment = the amount contractually due on that date
• m = the number of months from commencement to that payment, so m = 0 for a payment in advance in the first month

For monthly leases this is the ordinary annuity most people would write down. For quarterly leases it matters that the same monthly basis is used, because a quarter compounds as (1 + OBR ÷ 12)³ and not as 1 + OBR ÷ 4. Discounting a quarterly lease at a quarter of the annual rate assumes less interest than the amortisation schedule actually charges, and the liability then fails to reach zero by the end of the lease. Lease Rater uses one convention in both places.

Payments in advance are discounted from the start of their period and payments in arrears from the end, which is the only difference between the two profiles.

Practical Example

Scenario: 5-year property lease, £60,000 a year, quarterly in advance, for a company with £5m revenue, £750k EBITDA, £600k EBIT, £60k interest, £2m debt, £300k cash and £1.5m tangible net worth in food and beverage manufacturing, ten years trading, unrated, borrowing against a debenture. The undiscounted total is £300,000.

This is a real run of the calculator, not an illustration:

1. Pass 1: discounted at the 5-year SONIA base of 4.7249% → present value £268,834 → OBR scores at 8.6778%.
2. Pass 2: re-discounted at 8.6778% → present value £246,210 → OBR scores at 8.6778% again, so the rate has stopped moving and the loop ends.
3. Final OBR: 8.6778%, with a sensitivity range of 7.18% to 10.18%.
4. Lease liability: £246,209.56, which is the present value at 8.6778%. Discounting £300,000 of payments at the reported rate gives the reported liability, which is the check an auditor is most likely to perform.

The security position is stated because it matters: the same company borrowing against a fixed charge over a specific asset prices at 6.9528%, and unsecured at 9.8928%. The example above is the middle of those three.

Important Rules for PV Calculation

DO:

• ✅ Use ex-VAT rent amounts. VAT is not part of the lease liability.
• ✅ Set payment timing (advance/arrears) correctly. This affects PV by ~1-2% of rent.
• ✅ Use annual rent figure consistently (don't mix monthly and annual).

DON'T:

• ❌ Subtract rent deposits from PV. Deposits are handled separately in the Security/Structure pillar (they reduce risk, not exposure).
• ❌ Add the NEW lease's PV to "Total Debt" field. Use existing debt only. The new lease liability will be recognised when you adopt FRS 102 (2026), but for OBR calculation purposes, it's the exposure we're measuring, not existing debt.
• ❌ Include VAT in rent figures. This inflates the exposure and gives an incorrect OBR.

When Convergence Might Take Longer

• Very long leases (15+ years): Higher sensitivity between rate and PV.
• Balloon payments: Back-loaded cash flows make PV more rate-sensitive.
• Edge cases: Near min/max spread thresholds, where the minimum depends on the security type (convergence has diminishing effect).

In these cases the loop may take more passes before the rate settles, run to the eight-pass limit, or reach the band boundary described above. The result is still reported and auditable in each case: the report states which of these happened.

What You'll Receive

• Headline OBR: Mid-point rate (e.g., 7.35%).
• Defensible Range: Low and high bounds (e.g., 6.85% - 7.85%) for sensitivity analysis and professional judgement.
• Component Breakdown: How much each pillar (Financial 45%, Security 30%, Sector/Size 15%, Exposure 10%) contributed to the total spread.
• 14 Financial Metrics: Your score for all 14 metrics with risk band classifications (Excellent/Strong/Satisfactory/Fair/Weak/Vulnerable).
• Key Drivers: Narrative bullets explaining what pushed the rate higher or lower, with examples across multiple metrics:
  • "Strong EBITDA margin of 18% and ICR of 8.2× support lower spread"
  • "High Net Debt/EBITDA of 3.8× and low cash buffer of 8% add risk premium"
  • "Excellent current ratio of 2.4× and quick ratio of 1.9× demonstrate strong liquidity"
• Professional PDF: Complete report with methodology, assumptions, SONIA metadata, and audit trail. Download and file in working papers.

Using the PDF Report

• Audit file: Include in lease accounting working papers as evidence of OBR determination.
• Board/management: Support lease vs buy decisions by showing borrowing-equivalent cost.
• Lenders: If renegotiating covenants post-FRS 102 adoption, show credible discount rates used.
• Multiple leases: Consistent methodology across portfolio supports audit quality and efficiency.

• Batch similar leases: If you have 10 vehicles on identical 3-year terms, run one OBR and apply consistently. Document the decision.
• Retain PDFs: Store in lease accounting files. If auditor asks "how did you get 7.35%?", you have a professional report to hand over.
• Re-run for material changes: If your credit profile deteriorates significantly (e.g., covenant breach, loss-making year), re-run OBR for new leases. Existing leases keep their original OBR unless remeasured.
• Sensitivity analysis: Use the range (low/mid/high) to model impact on balance sheet and P&L. Show auditors you've considered reasonable scenarios.
• Document policy: Record in accounting policies: "OBRs determined using Lease Rater methodology, reflecting SONIA base + entity-specific credit spread. Rates reviewed annually or on material credit changes."

This page covers using the calculator. The accounting behind it is set out separately: what an obtainable borrowing rate is, how to calculate one by hand, choosing between the OBR and the IBR, and what changed in FRS 102 from 2026. How Lease Rater calibrates the spread is on Our Methodology.

What if my financials are very different from last year?

Use the most recent full-year figures. If there's been a material change (e.g., acquisition, divestment, restructuring), consider using pro-forma or adjusted figures that better reflect current trading. Discuss with your accountant.

Can I use group financials for a subsidiary lease?

If the subsidiary is guaranteed by the parent or operates as a single economic unit (cash pooling, shared facilities), yes. If the subsidiary is ring-fenced or separately financed, use subsidiary-only figures.

What if I have multiple leases with different terms?

Run separate OBRs for materially different profiles. Leases of materially different length should not share a rate; see how to calculate an OBR on term matching. However, 5 vehicles on identical 3-year terms can share one OBR.

Do I need to update OBRs every year?

No. Once a lease is recognised, the OBR is locked in (unless you remeasure the liability, e.g., lease modification). You only need new OBRs for new leases entered during the year. However, if your credit profile changes materially, auditors may ask you to reconsider.

What if the rate looks too high or too low?

Check your inputs:

• Too high? Common causes: negative EBITDA, very high leverage (Debt/TNW >5x), very small company (micro), weak sector (hospitality, construction).
• Too low? Common causes: strong financials (low leverage, high ICR), large company, good security (fixed charge), stable sector.

The range gives you flexibility. If the mid-point is 7.35% but you believe (and can justify) your credit is better, use the low end (6.85%). Document your reasoning.

What is the maximum lease term Lease Rater supports?

Lease Rater's risk-free rate curve uses published Bank of England SONIA OIS spot rates through 25 years, covering virtually all UK commercial and property leases:

• Published points: 1Y, 2Y, 3Y, 5Y, 7Y, 10Y, 15Y, 20Y, and 25Y
• Intermediate terms: Rates are linearly interpolated between adjacent points (for example, 8.5-year and 17-year leases)
• Beyond 25 years: For ultra-long leases exceeding 25 years, the 25-year rate is applied as a conservative cap

No manual input needed: The system automatically selects the correct base rate for your lease term. The curve handles everything from 1 year onward, including long-term leases.

Methodology note: Risk-free base rates are the Bank of England SONIA OIS zero-coupon spot rates, used from 1Y through 25Y, with linear interpolation between published points. Leases longer than 25 years use the 25-year rate as a conservative cap.

You now understand every input field and how the calculation works. Time to generate your OBR report.

Start your calculation now