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Commercial mortgages

We've selected a range of commercial mortgage lenders below.

Go straight to their site to find out more or contact our preferred Commercial Mortgages Broker Watts Commercial Finance on 03300 417275.

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Commercial mortgages

  • Max LTV
    70%
    Rates
    Variable
    Term
    5 years - 25 years
    Borrowing Amount
    £150K - £5m
    Early Redemption
    1st 5yrs: 3%

    Other Sectors: Commercial Investment Property 70%, Garage Showrooms 65%, Hotels 70%, Offices 70%, Professional Practices 70%, Public Houses 70%, Retail 70%, Schools and Nurseries 70%

  • Max LTV
    70%
    Rates
    Variable and Fixed
    Term
    1 year - 5 years
    Borrowing Amount
    £750K - £20m
    Early Redemption
    None

    Other Sectors: Commercial Industrial 60%, Commercial Property Development 65%, Hotels 60%, Offices 60%, Residential Property  Development 60%, Retail 60%

  • Max LTV
    75%
    Rates
    Variable
    Term
    3 years - 5 years
    Borrowing Amount
    £150K - £2m
    Early Redemption
    1st 3yrs: 1%

    Other Sectors: Commercial Industrial 75%, Commercial Investment Property 75%, Garage Showrooms - refer to lender, Hotels - 70%, Nursing/Care Homes 70%, Offices 75%, Professional Practices 70%, Public Houses 70%, Residential Investment Property 75%, Residential Property Development 75%, Retail 75%

  • Max LTV
    60%
    Rates
    Variable and Fixed
    Term
    5 years - 30 years
    Borrowing Amount
    £25K - Negotiable
    Early Redemption
    Refer to lender

    Other Sectors: None

  • Max LTV
    70%
    Rates
    Negotiable
    Term
    1 year - 15 years
    Borrowing Amount
    £50K - £5m
    Early Redemption
    1st yr: 1% of advance

    Other Sectors: Commercial Industrial 60%, Commercial Investment Property 70%, Offices 60%, Residential Investment Property 70%, Retail 70%

  • Max LTV
    75%
    Rates
    Variable and Fixed
    Term
    3 years - 25 years
    Borrowing Amount
    £50K - £25m
    Early Redemption
    Up to 3%

    Other Sectors: Commercial Industrial 75%, Commercial Investment Property 75%, Hotels 75%, Offices 75%, Professional Practices 75%, Public Houses 60%, Residential Investment Property 75%, Retail 75%, Schools and Nurseries 75%

  • Max LTV
    70%
    Rates
    Variable
    Term
    10 years - 25 years
    Borrowing Amount
    £15K - £2m
    Early Redemption
    1st 2yrs: 2%

    Other Sectors: Farms 70%, Offices 70%, Professional Practices 70%, Residential Investment Property 70%, Residential Property Development 70%, Retail 70%, Schools and Nurseries 70%

  • Max LTV
    70%
    Rates
    Variable and Fixed
    Term
    1 year - 25 years
    Borrowing Amount
    £100K - Negotiable
    Early Redemption
    3-6 months interest on amount repaid

    Other Sectors: Commercial Property Development 70%, Farms 70%, Franchises 70%, Hotels 70%, Nursing/Care Homes 70%, Offices 70%, Professional Practices 70%, Public Houses 70%, Residential Property Development 70%, Retail 70%, Schools and Nurseries 70%

  • Max LTV
    65%
    Rates
    Variable and Fixed
    Term
    Negotiable
    Borrowing Amount
    £30K - £2m
    Early Redemption
    3 months interest

    Other Sectors: Commercial Industrial 65%, Commercial Investment Property 65%, Farms 65%, Franchises 65%, Garage Showrooms 65%, Hotels 65%, Nursing/Care Homes 65%, Professional Practices 65%, Public Houses 65%, Residential Investment Property 65%, Retail 65%, Schools and Nurseries 65%

  • Max LTV
    75%
    Rates
    Variable and Fixed
    Term
    1 month - 8 years
    Borrowing Amount
    £25K - £20m
    Early Redemption
    Full outstanding balance, with potential discount

    Other Sectors: Commercial Industrial 75%, Commercial Investment Property 75%, Farms 75%, Franchises 65%, Garage Showrooms 75%, Hotels 75%, Nursing/Care Homes 75%, Offices 75%, Professional Practices 75%, Public Houses 75%, Residential Investment Property 75%, Retail 75%, Schools and Nurseries 75%

  • Max LTV
    100%
    Rates
    Variable and Fixed
    Term
    1 year - 25 years
    Borrowing Amount
    £25K - Negotiable
    Early Redemption
    Refer to lender

    Other Sectors: Commercial Industrial 70%, Commercial Investment Property 65%, Commercial Property Development 60%, Farms 70%, Franchises 70%, Garage Showrooms 70%, Hotels 70%, Nursing/Care Homes 65%, Offices 70%, Petrol Stations 70%, Public Houses 60%, Residential Investment Property 70%, Residential Property Development 65%, Retail 70%, Schools and Nurseries 70%

  • Max LTV
    65%
    Rates
    Variable and Fixed
    Term
    1 year - 15 years
    Borrowing Amount
    £26K - £500K
    Early Redemption
    Refer to lender

    Other Sectors: Commercial Industrial 65%, Commercial Investment Property 65%, Commercial Property Development 65%, Farms 65%, Franchises 65%, Garage Showrooms 65%, Hotels 65%, Nursing/Care Homes 65%, Offices 65%, Petrol Stations 65%, Professional Practices 65%, Residential Investment Property 65%, Residential Property Development 65%, Retail 65%, Schools and Nurseries 65%

  • Max LTV
    80%
    Rates
    Variable and Fixed
    Term
    2 years - 30 years
    Borrowing Amount
    £100K - Negotiable
    Early Redemption
    Variable - 1st 5yrs: 3%, then 1%. Fixed - 1st 1yr: 4%, 3% for fixed term, then 1%.

    Other Sectors: Commercial Industrial 65%, Commercial Investment Property 65%, Offices 65%, Professional Practices 65%, Retail 65%

  • Max LTC / LTGDV
    75% / 60%
    Rates
    Variable and Fixed
    Term
    1 year - 10 years
    Borrowing Amount
    £1m - Negotiable
    Early Redemption
    1st 36mths: 180 day interest penalty

    Other Sectors: Commercial Industrial 65%, Commercial Investment Property 60%, Commercial Property Development 50%, Farms 65%, Garage Showrooms 65%, Hotels 65%, Nursing/Care Homes 65%, Offices 65%, Petrol Stations 65%, Professional Practices 65%, Public Houses 65%, Residential Investment Property 70%, Retail 65%, Schools and Nurseries 65%

  • Max LTV
    75%
    Rates
    Variable and Fixed
    Term
    2 years - 30 years
    Borrowing Amount
    £25K - Negotiable
    Early Redemption
    Refer to lender

    Other Sectors: Commercial Industrial 60%, Commercial Investment Property 65%, Commercial Property Development 60%, Farms 75%, Franchises 75%, Garage Showrooms 60%, Hotels 60%, Nursing/Care Homes 60%, Offices 75%, Petrol Stations 60%, Professional Practices 75%, Public Houses 60%, Residential Investment Property 65%, Residential Property Development 60%, Schools and Nurseries 75%

  • Max LTV
    70%
    Rates
    Variable and Fixed
    Term
    1 year - 20 years
    Borrowing Amount
    £1K - Negotiable
    Early Redemption
    Refer to lender

    Other Sectors: Commercial Industrial 70%, Farms 70%, Franchises 70%, Garage Showrooms 70%, Hotels 70%, Nursing/Care Homes 70%, Offices 70%, Petrol Stations 70%, Professional Practices 70%, Public Houses 70%, Retail 70%

  • Max LTV
    70%
    Rates
    Variable
    Term
    5 years - 25 years
    Borrowing Amount
    £150K - £5m
    Early Redemption
    1st 5yrs: 3%

    Other Sectors: Commercial Investment Property 70%, Garage Showrooms 65%, Hotels 70%, Offices 70%, Professional Practices 70%, Public Houses 70%, Retail 70%, Schools and Nurseries 70%

  • Max LTV
    70%
    Rates
    Variable and Fixed
    Term
    1 year - 5 years
    Borrowing Amount
    £750K - £20m
    Early Redemption
    None

    Other Sectors: Commercial Industrial 60%, Commercial Property Development 65%, Hotels 60%, Offices 60%, Residential Property  Development 60%, Retail 60%

  • Max LTV
    75%
    Rates
    Variable
    Term
    3 years - 5 years
    Borrowing Amount
    £150K - £2m
    Early Redemption
    1st 3yrs: 1%

    Other Sectors: Commercial Industrial 75%, Commercial Investment Property 75%, Garage Showrooms - refer to lender, Hotels - 70%, Nursing/Care Homes 70%, Offices 75%, Professional Practices 70%, Public Houses 70%, Residential Investment Property 75%, Residential Property Development 75%, Retail 75%

  • Max LTV
    60%
    Rates
    Variable and Fixed
    Term
    5 years - 30 years
    Borrowing Amount
    £25K - Negotiable
    Early Redemption
    Refer to lender

    Other Sectors: None

  • Max LTV
    70%
    Rates
    Negotiable
    Term
    1 year - 15 years
    Borrowing Amount
    £50K - £5m
    Early Redemption
    1st yr: 1% of advance

    Other Sectors: Commercial Industrial 60%, Commercial Investment Property 70%, Offices 60%, Residential Investment Property 70%, Retail 70%

  • Max LTV
    75%
    Rates
    Variable and Fixed
    Term
    3 years - 25 years
    Borrowing Amount
    £50K - £25m
    Early Redemption
    Up to 3%

    Other Sectors: Commercial Industrial 75%, Commercial Investment Property 75%, Hotels 75%, Offices 75%, Professional Practices 75%, Public Houses 60%, Residential Investment Property 75%, Retail 75%, Schools and Nurseries 75%

  • Max LTV
    70%
    Rates
    Variable
    Term
    10 years - 25 years
    Borrowing Amount
    £15K - £2m
    Early Redemption
    1st 2yrs: 2%

    Other Sectors: Farms 70%, Offices 70%, Professional Practices 70%, Residential Investment Property 70%, Residential Property Development 70%, Retail 70%, Schools and Nurseries 70%

  • Max LTV
    70%
    Rates
    Variable and Fixed
    Term
    1 year - 25 years
    Borrowing Amount
    £100K - Negotiable
    Early Redemption
    3-6 months interest on amount repaid

    Other Sectors: Commercial Property Development 70%, Farms 70%, Franchises 70%, Hotels 70%, Nursing/Care Homes 70%, Offices 70%, Professional Practices 70%, Public Houses 70%, Residential Property Development 70%, Retail 70%, Schools and Nurseries 70%

  • Max LTV
    65%
    Rates
    Variable and Fixed
    Term
    Negotiable
    Borrowing Amount
    £30K - £2m
    Early Redemption
    3 months interest

    Other Sectors: Commercial Industrial 65%, Commercial Investment Property 65%, Farms 65%, Franchises 65%, Garage Showrooms 65%, Hotels 65%, Nursing/Care Homes 65%, Professional Practices 65%, Public Houses 65%, Residential Investment Property 65%, Retail 65%, Schools and Nurseries 65%

  • Max LTV
    75%
    Rates
    Variable and Fixed
    Term
    1 month - 8 years
    Borrowing Amount
    £25K - £20m
    Early Redemption
    Full outstanding balance, with potential discount

    Other Sectors: Commercial Industrial 75%, Commercial Investment Property 75%, Farms 75%, Franchises 65%, Garage Showrooms 75%, Hotels 75%, Nursing/Care Homes 75%, Offices 75%, Professional Practices 75%, Public Houses 75%, Residential Investment Property 75%, Retail 75%, Schools and Nurseries 75%

  • Max LTV
    100%
    Rates
    Variable and Fixed
    Term
    1 year - 25 years
    Borrowing Amount
    £25K - Negotiable
    Early Redemption
    Refer to lender

    Other Sectors: Commercial Industrial 70%, Commercial Investment Property 65%, Commercial Property Development 60%, Farms 70%, Franchises 70%, Garage Showrooms 70%, Hotels 70%, Nursing/Care Homes 65%, Offices 70%, Petrol Stations 70%, Public Houses 60%, Residential Investment Property 70%, Residential Property Development 65%, Retail 70%, Schools and Nurseries 70%

  • Max LTV
    65%
    Rates
    Variable and Fixed
    Term
    1 year - 15 years
    Borrowing Amount
    £26K - £500K
    Early Redemption
    Refer to lender

    Other Sectors: Commercial Industrial 65%, Commercial Investment Property 65%, Commercial Property Development 65%, Farms 65%, Franchises 65%, Garage Showrooms 65%, Hotels 65%, Nursing/Care Homes 65%, Offices 65%, Petrol Stations 65%, Professional Practices 65%, Residential Investment Property 65%, Residential Property Development 65%, Retail 65%, Schools and Nurseries 65%

  • Max LTV
    80%
    Rates
    Variable and Fixed
    Term
    2 years - 30 years
    Borrowing Amount
    £100K - Negotiable
    Early Redemption
    Variable - 1st 5yrs: 3%, then 1%. Fixed - 1st 1yr: 4%, 3% for fixed term, then 1%.

    Other Sectors: Commercial Industrial 65%, Commercial Investment Property 65%, Offices 65%, Professional Practices 65%, Retail 65%

  • Max LTC / LTGDV
    75% / 60%
    Rates
    Variable and Fixed
    Term
    1 year - 10 years
    Borrowing Amount
    £1m - Negotiable
    Early Redemption
    1st 36mths: 180 day interest penalty

    Other Sectors: Commercial Industrial 65%, Commercial Investment Property 60%, Commercial Property Development 50%, Farms 65%, Garage Showrooms 65%, Hotels 65%, Nursing/Care Homes 65%, Offices 65%, Petrol Stations 65%, Professional Practices 65%, Public Houses 65%, Residential Investment Property 70%, Retail 65%, Schools and Nurseries 65%

  • Max LTV
    75%
    Rates
    Variable and Fixed
    Term
    2 years - 30 years
    Borrowing Amount
    £25K - Negotiable
    Early Redemption
    Refer to lender

    Other Sectors: Commercial Industrial 60%, Commercial Investment Property 65%, Commercial Property Development 60%, Farms 75%, Franchises 75%, Garage Showrooms 60%, Hotels 60%, Nursing/Care Homes 60%, Offices 75%, Petrol Stations 60%, Professional Practices 75%, Public Houses 60%, Residential Investment Property 65%, Residential Property Development 60%, Schools and Nurseries 75%

  • Max LTV
    70%
    Rates
    Variable and Fixed
    Term
    1 year - 20 years
    Borrowing Amount
    £1K - Negotiable
    Early Redemption
    Refer to lender

    Other Sectors: Commercial Industrial 70%, Farms 70%, Franchises 70%, Garage Showrooms 70%, Hotels 70%, Nursing/Care Homes 70%, Offices 70%, Petrol Stations 70%, Professional Practices 70%, Public Houses 70%, Retail 70%

Note

Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment either if you click the links or if you use their services after you click through to their site. All information is subject is subject to change without notice. Please check all terms before making any decisions.

Disclaimer

All rates subject to change without notice. Please check all rates and terms before borrowing. ANY PROPERTY GIVEN AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER DEBTS SECURED ON IT.

The list of commercial mortgage providers on this page is a selection of services available and gives you an idea of the kind of options available. You can find out more about the individual products by visiting any of the providers listed. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts.co.uk will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts.co.uk recommends you obtain independent financial advice.

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Commercial mortgages

Michelle Monck

Michelle Monck

Consumer Finance Expert

At a glance

  • Commercial mortgages are simply a loan taken out by a business in order to buy an existing or new property.
  • There are two basic types of commercial mortgage: an owner-occupier mortgage when a business is buying a property to trade from, and a commercial investment mortgage, where the business is buying property as an investment opportunity.
  • In commercial mortgages both deposit requirements and interest rates tend to be higher than for a residential mortgage.

What is a commercial mortgage?

Commercial mortgages in the UK are designed specifically for businesses and business owners. They're the next step up from business loans, used in situations where you want to buy a commercial property and are seeking a substantial loan to do so. As the commercial mortgage market can be a complex one, it's smart to consider the support of a commercial property finance specialist to help you navigate the market. 

What types of commercial mortgages are available?

There are generally two distinct types of commercial property mortgage – one is essentially an owner-occupier mortgage where you're looking to buy a property for trading premises, and the other is a commercial investment mortgage, if you're purely looking to invest in commercial property and perhaps want to let it out to a third party (in which case, it may be viewed as commercial buy-to-let). The one you choose could have an impact on the kind of finance and resulting rates you're offered, so as with everything else in this complex area, you'll want to seek the support of a commercial property finance specialist to navigate the market.

Bear in mind that, whichever kind of mortgage you're after, you probably won't be able to buy the property in full by using this kind of loan. Mortgages for business generally require a deposit of around 25% to 40%, but in some cases you may be able use another property as security, provided you have considerable equity in it. Most commercial mortgage rates are variable and you'll be able to choose from a range of terms, typically from three years to as many as 40, but 15 to 30-year terms are generally more common. Shorter term commercial property finance is also available, but this is more commonly referred to as a property development or bridging loan.

How can I get a mortgage for a commercial property?

Obtaining a commercial or business mortgage is based on the ability of your business to make the repayments, so you'll not only need to be confident that your business can cover it, but that you can prove it to potential lenders. You may need to provide a detailed business plan which demonstrates that you can make the repayments, and a professional valuation will usually be required before commercial property finance can be secured.

Generally speaking, you shouldn't have any trouble finding a commercial mortgage through high street lenders, though you may have to move your business banking facilities to the new provider if you're going to achieve the best terms. Conversely, you could always approach a specialist lender who won't want your business banking, and they may offer interest-only payment terms and loans with lower deposit requirements, the trade-off being that rates tend to be higher.

How much can I borrow?

This will depend on the type of commercial property finance you're looking for. If it's for owner-occupied property, you'll generally be able to find a mortgage at up to 70-75% loan-to-value (LTV), provided you can supply the necessary deposit. You'll be subject to a rigorous affordability assessment, too, which means the amount you can borrow will be dictated by the amount you're able to provide upfront and related affordability criteria.

It's a little different when it comes to a commercial investment mortgage. Here, the amount you'll be able to borrow will depend on the expected rental income generated by the investment, but even so, the mortgage typically won't be able to exceed 65% of the initial purchase price. In some cases, you may be able to find a deal with lower deposit requirements, but you'll be required to provide significant collateral instead.

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Commercial mortgage rates

Commercial mortgage interest rates will vary according to the lender and your individual requirements, with strict underwriting procedures and affordability assessments in place. In general, commercial mortgage rates in the UK are determined by a thorough assessment of your business – lenders will analyse your past performance, the current position and long-term plans of the business (or the one you're considering) before deciding viability and quoting an interest rate. Because of this bespoke nature, rates are negotiable rather than set in stone, but they may be higher if the underwriter identifies higher risk in the proposal.

Rates tend to be variable and are often based on the Bank of England base rate. They're typically quoted as "X% over base rate", similar to tracker mortgages in the residential sector. In some cases, you'll be able to find commercial investment mortgage rates that are fixed, but these aren't the norm.

Why you should consider using a commercial mortgage broker

  • Suitable knowledge of the sector
  • Necessary contacts to help you find the best deal
  • Brokers can present your case to lenders on your behalf

The commercial sector is incredibly complex, and this is reason enough in itself to use a commercial mortgage broker. Not only do they have suitable knowledge of the sector, but they also have the necessary contacts to help you find the best deal, giving you access to options you may not be able to find on your own.

You need to be fully co-operative in all dealings with your broker as they'll be the one presenting your case to lenders on your behalf, and don't use several brokers at once, as you could end up without any kind of deal. Be vigilant and look for brokers who are members of the National Association of Commercial Finance Brokers (NACFB, the professional body of the industry), as they'll have the necessary professional indemnity insurance and are required to stick to a code of practice, ensuring a thorough and professional service.

Restrictions and fees

The greatest restrictions tend to be in terms of the security you're required to provide. This is typically the property itself, together with a cash deposit, but if you're not able to stump up the cash you may have to offer additional security such as another property or a charge over other assets.

Other restrictions could arise in the form of leasehold property, with it generally only being possible to secure mortgages for business if the lease has more than 70 years remaining (if not, additional security could again be required).

Then there are the fees involved. These can be wide-ranging, and you may come across any or all of the following:

Moneyfacts tip Michelle Monck

Looking to secure the best commercial mortgage rate for your business? You'll want to seek the support of a commercial property finance specialist to navigate the market as you may find that certain deals are only accessible through an intermediary. 

Arrangement fees

These are typically 1-2% of the loan amount (but for smaller loans they may be higher), and are usually added on completion of the loan.

Commitment fees

Alongside the arrangement fee, some lenders will charge a 'commitment fee' in order to cover the work they undertake if you don’t accept the offer. This is non-refundable and will usually be payable upfront as part of your formal application.

Valuation fees

A valuation will be required as part of your application, and will often be far more in-depth than in the residential sector. The price can vary depending on the complexity of the property and the case, and much like the eventual mortgage rate, are based on a bespoke quotation.

Legal fees

When arranging a mortgage for a commercial property, you'll be required to pay your lender's legal fees as well as your own, with the eventual price again determined by your individual case.

Broker fees

As mentioned, using a commercial mortgage broker can be a great way to access the best deal, but you'll need to pay for the privilege; you can expect fees of up to 1% of the loan value, arranged when they've found you a loan offer based on your pre-agreed terms.

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Commercial Mortgage FAQs

Are commercial mortgages regulated?

No. Generally speaking, these mortgages are in the realm of unregulated lending; there may be some cases where they're regulated (such as if you were buying a property to live in as well as run a business from, in which case the waters become slightly murkier), but this is the exception rather than the rule. This makes it even more important to speak to a broker who's a member of NACFB for complete peace of mind.

Can I refinance my business mortgage?

Yes. In much the same way as in the residential sector, it's perfectly possible to refinance this kind of mortgage, in that you'll pay off your existing loan by replacing it with a new one. This may be to free up cash or secure a better interest rate, but while it's possible, it doesn't mean it'll be easy – it could be an expensive process as you may be hit with early repayment charges and new booking fees, for example, so make sure to weigh up the pros and cons of refinancing.

Can I get a business mortgage with no deposit?

Occasionally, but not very easily, and you'll usually have to stump up something significant as security (such as another property or other assets).

Is business mortgage interest tax deductible?

Yes. One of the advantages of commercial mortgages, compared to alternative routes, is that the mortgage interest is tax deductible. 

Why are commercial mortgage rates higher than for residential mortgages?

A lot of it is down to risk and the terms of the mortgage itself. With mortgages for business, the ability of a borrower to make repayments is dependent on the performance of the business, and if it doesn't perform, the bank will have limited assets from which to make its money back. It's also harder to assess the creditworthiness of a business, particularly a new one, and terms tend to be a lot shorter, too.

Can I get a buy-to-let commercial mortgage?

In essence, a commercial investment mortgage is a buy-to-let mortgage for commercial tenants, with only the terminology being different. In traditional buy-to-let, a private landlord rents out a property to residential tenants, whereas under a commercial arrangement, the property is let to a commercial enterprise. Nonetheless, the term "buy-to-let commercial mortgage" is rarely used, as it's simply thought of as a commercial investment loan.

Are commercial mortgages interest only?

Not generally. When giving a commercial mortgage, lenders want to see their money being fully repaid - both capital and interest. However, with investment mortgages, lenders do understand the tax position of their customer, so in these cases they will help by not insisting on capital repayment so long as the LTV is below a certain amount (often 60%), allowing the borrower to pay interest only.

Can you get a commercial mortgage without any accounts?

A lender will require to see proof that the proposed loan would be affordable to the borrower, to do this the lender will normally ask to see the last three years’ accounts to prove this. If your business has been trading for less than three years, you will not be about to show the accounts needed, however exceptions can be made and a professional standard business plan would be essential in arguing the case for loans where affordability is not readily apparent.

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