Commercial Mortgages UK

Commercial Mortgage Finance

A commercial mortgage is a loan secured against property used for business purposes, from the offices a company trades from, to investment buildings let to third-party tenants, to specialist assets such as care homes, hotels, and industrial estates. Platinum Global Bridging Finance arranges commercial mortgages across the full spectrum of property types and borrower structures, with access to a lender panel spanning high-street banks, challenger banks, and specialist commercial lenders. Facilities from £150,000 to £150m+. No broker fee on loans of £500,000 or above.

What Is a Commercial Mortgage?

A commercial mortgage is a long-term secured loan, typically running from 3 to 25 years, where the security is a commercial or mixed-use property. Unlike residential mortgages, which are tightly regulated and assessed primarily on personal income, commercial mortgages are assessed on a combination of the property’s value, the borrower’s financial strength, and the income, either trading or rental, generated from the property.

Commercial mortgages sit outside FCA regulation in most cases. Where the property is more than 40% residential by floor area or rental value, regulated lending rules apply. For the majority of commercial property transactions, offices, retail, industrial, hospitality, care, and pure investment assets, the loan is unregulated, which gives lenders greater flexibility on structure, term, and criteria.

Most commercial mortgages are arranged on an interest-only or capital and interest (repayment) basis. Interest-only is common for investment properties where the borrower is managing cash flow against rental income. Repayment structures are more typical for owner-occupiers who intend to own the building outright over the loan term.

Fixed rate commercial mortgages provide payment certainty for a set period, typically 2, 3, 5, or 10 years, after which the loan reverts to the lender’s standard variable rate or is refinanced. Variable rate commercial mortgages track the Bank of England base rate plus a lender margin and can move up or down during the loan term. High-street lenders tend to favour variable rate products; specialist and challenger bank lenders are more likely to offer fixed rate commercial mortgages. For most businesses, the certainty of a fixed rate over the initial term outweighs the potential cost benefit of a variable rate, particularly in a period of base rate uncertainty.

Types of Commercial Mortgage

The two fundamental categories are owner-occupied and investment, but within those sit a wide range of property types and borrower structures, each assessed differently by lenders.

Owner-Occupied Commercial Mortgages

Where a business buys the premises from which it trades, the loan is assessed primarily against the company’s financial performance, turnover, adjusted net profit, debt service coverage, and the sustainability of trading income. Lenders want to see at least two years of filed accounts, though specialist lenders will consider 12 months of trading in certain sectors. Allica Bank and Shawbrook are particularly active in the owner-occupied space for established SMEs. Read more on our owner-occupied commercial mortgages page.

Commercial Investment Mortgages

Where a property is purchased to let to a third-party tenant, the loan is assessed against the rental income relative to the mortgage payment, expressed as a debt service coverage ratio (DSCR), typically required to be 125% to 150% of the interest payment. The strength and length of the lease, the quality of the tenant covenant, and the property’s marketability all affect pricing and maximum LTV. InterBay and Together are consistently active commercial investment lenders for UK investors. More detail on our commercial investment mortgages page.

Semi-Commercial and Mixed-Use

Properties combining commercial and residential elements, a shop with a flat above, a pub with letting rooms, an office converted to include residential units, are assessed under a blended approach. Most lenders require the residential element to represent at least 40% of value or floor area to trigger regulated lending rules; below that threshold, the loan is assessed commercially. See our semi-commercial and mixed-use finance page for detail.

Specialist Sector Mortgages

Care homes, hotels, pubs, petrol stations, places of worship, and agricultural land each attract a smaller pool of lenders with more detailed underwriting requirements. We place specialist cases with lenders who actively seek that asset class. See our dedicated pages for care home finance and hotel and hospitality finance.

Commercial Mortgage Rates in 2026

Commercial mortgage rates in the UK currently range from approximately 5.5% to 9% per annum, depending on property type, LTV, borrower profile, and lender appetite. The spread between best and worst rate for any given transaction can be significant, matching the case to the right lender at the right time is where an experienced broker adds tangible value.

For owner-occupied mortgages, fixed rates currently run from approximately 5.5% to 7.5% per annum for strong applicants with established trading histories and deposits of 30%+. Variable rates sit at Bank of England base rate plus a lender margin of 2.0% to 5.5%, producing total variable rates of approximately 5.2% to 8.0% at the time of writing. Investment properties are priced higher due to additional risk, with fixed rates typically ranging from 6.0% to 8.5%. Specialist sectors such as care homes, hotels, and leisure assets sit towards the upper end of the range or above it.

Mortgage Type	Indicative Rate Range (2026)	Typical LTV
Owner-Occupied (strong trading)	5.5% – 7.0% pa	Up to 75%
Owner-Occupied (start-up / adverse)	7.0% – 9.0% pa	Up to 65%
Commercial Investment	6.0% – 8.5% pa	Up to 70%
Semi-Commercial	6.0% – 8.0% pa	Up to 75%
Specialist Sectors	6.5% – 9.5%+ pa	Up to 65%

Rates above are indicative as at July 2026 and subject to change. The deposit size has a direct and material impact on the rate achieved, a 40% deposit will typically unlock meaningfully better pricing than a 25% deposit with the same lender. Swap rate volatility, driven by geopolitical and macroeconomic factors, continues to influence fixed rate pricing across the commercial mortgage market.

Commercial Mortgage LTV and Deposit Requirements

Most commercial mortgage lenders work to maximum LTVs of 65% to 75%, meaning a deposit or equity position of 25% to 35% is typically required. Some lenders will stretch to 80% LTV for the strongest owner-occupied cases, established businesses with clean credit, proven profitability, and a property in a prime location.

Where the deposit is limited, additional security, a second charge on another property, a personal guarantee, or a debenture over business assets, can sometimes support a higher LTV. We regularly structure complex cases involving cross-collateralisation and multiple security packages.

For investors seeking to gear a commercial portfolio, commercial investment mortgages are typically capped at 70% LTV, with the rental yield and DSCR being the primary constraint rather than the deposit itself.

Who Can Apply for a Commercial Mortgage?

Commercial mortgages are available to a wide range of borrowing structures:

Sole traders and partnerships purchasing trading premises
Limited companies buying freehold or long leasehold commercial property
SPVs and holding companies acquiring investment assets
LLPs, trusts, and pension funds (SIPP/SSAS) purchasing commercial property
Offshore entities and non-UK residents, see our expat bridging loans page and offshore bridging loans page for related guidance
Property investors building or refinancing a commercial portfolio

First-time commercial buyers are considered by specialist lenders, particularly where the borrower has relevant sector experience or a strong personal financial profile. Start-up businesses are more challenging but not impossible, some lenders will assess based on projected income and a robust business plan.

Commercial Mortgages With Adverse Credit

Adverse credit does not automatically rule out a commercial mortgage. Specialist and challenger bank lenders, including Together Money and certain debt fund lenders, will consider cases involving CCJs, defaults, previous IVAs, and missed payments, assessed on a case-by-case basis. The rate will be higher and the maximum LTV typically lower than for a clean credit application, but a well-structured and honestly presented case can often be placed. The key is full disclosure upfront, lenders who specialise in adverse credit commercial mortgage cases underwrite with their eyes open; what they cannot tolerate is information emerging mid-process that was not disclosed at the outset.

Commercial Mortgage Remortgages

Remortgaging an existing commercial property is one of the most effective ways to reduce borrowing costs, release equity, or restructure debt. Where the property value has increased since the original mortgage was taken out, or where the loan balance has reduced through repayments, the LTV position may have improved significantly, often enough to access a materially better rate. We review existing commercial mortgage terms on behalf of clients and place remortgage cases with lenders who will improve on the current terms. There is no broker fee on remortgages of £500,000 or above.

The Commercial Mortgage Application Process

Commercial mortgage applications involve more documentation and a longer timeline than residential lending. A typical timeline from application to completion is 6 to 12 weeks for a straightforward case, and 12 to 20 weeks for complex transactions involving specialist assets, complex ownership structures, or planning considerations.

Documentation lenders typically require includes:

Two to three years of filed company accounts or self-assessment tax returns
Recent management accounts (if the last filed accounts are more than 9 months old)
Three to six months of business bank statements
Details of the property, title, tenancy schedule, lease terms where applicable
Heads of terms or memorandum of sale for a purchase
Evidence of deposit funds or equity position
Business plan and cash flow projections for start-up or early-stage applicants

A commercial valuation (RICS Red Book) will be instructed by the lender and paid for by the borrower. Valuation fees vary by property size and complexity but typically run from £1,500 to £5,000+ for standard commercial assets and considerably more for specialist properties. The valuation fee is non-refundable if the application is subsequently declined.

Commercial Mortgage Costs and Fees

In addition to the interest rate, commercial mortgages involve several transactional costs that should be factored into the total acquisition or refinancing cost:

Arrangement fee: Typically 1% to 2% of the loan amount, payable to the lender on completion. Can sometimes be added to the loan.
Valuation fee: Payable upfront to the lender’s appointed surveyor. Non-refundable if the application is declined after valuation.
Legal fees: Both the borrower and lender instruct solicitors. Expect dual legal costs, borrower’s solicitors and lender’s solicitors, both charged to the borrower.
Broker fee: Platinum Global charges no broker fee on facilities of £500,000 or above. For smaller loans, a fee may apply and will always be disclosed in advance.
Exit or early repayment charges: Some lenders impose ERCs during a fixed rate period. These vary widely and should be checked at the term sheet stage.

Commercial Mortgage vs Commercial Bridging Loan

A commercial mortgage is a long-term product (3–25 years) suited to stabilised assets with clear rental income or strong trading cashflow. A commercial bridging loan is a short-term product (1–24 months) used where speed is essential, where the property is unmortgageable in its current condition, or where the borrower needs to complete before long-term finance can be arranged.

Common bridge-to-mortgage sequences include purchasing a vacant commercial building via bridge, completing a refurbishment or achieving full occupancy, then refinancing onto a commercial mortgage once the asset meets mainstream lender criteria. We arrange both the bridging loan and the exit mortgage, managing the full transaction lifecycle.

Where a commercial purchase requires speed, auction finance, for example, a commercial auction bridging loan can complete in 3 to 10 working days, allowing the buyer to meet the 28-day completion deadline.

Development Finance vs Commercial Mortgage

For projects involving ground-up construction or significant conversion works, a commercial mortgage is not appropriate, the property does not yet exist in its completed form. Development finance is the correct product, with funds released in staged drawdowns against a build programme. Once the scheme is complete and producing income, a commercial mortgage is typically used to refinance the development facility. We arrange both, see our commercial development finance page for more detail.

Worked Example: Commercial Investment Mortgage

A property investor acquires a fully let office building in Manchester for £2,000,000. The property generates £140,000 per annum in rental income on a 10-year lease to a strong tenant covenant.

Purchase price: £2,000,000
LTV: 65% = Loan of £1,300,000
Rate: 6.5% pa (interest only)
Annual interest cost: £84,500
DSCR: £140,000 / £84,500 = 1.66x (comfortably exceeds the 1.25x minimum)
Arrangement fee: 1.5% = £19,500
Deposit required: £700,000

This case would be placed with a specialist commercial investment lender. The strong DSCR and quality tenant covenant would support a competitive rate. No broker fee applies on this facility as it exceeds £500,000.

Worked Example: Owner-Occupied Commercial Mortgage

A manufacturing business with 8 years of trading history purchases its existing industrial unit from the landlord at £850,000. The business generates £320,000 adjusted net profit per annum.

Purchase price: £850,000
LTV: 70% = Loan of £595,000
Rate: 6.25% pa fixed for 5 years (capital and interest, 20-year term)
Monthly payment: approximately £4,470
DSCR: £320,000 / £53,640 annual interest = 5.97x (well above minimum)
Arrangement fee: 1.5% = £8,925
Deposit required: £255,000

No broker fee applies. The strong trading history, established profitability, and owner-occupied nature of the transaction would attract competitive terms from lenders including Allica Bank and Shawbrook.

Frequently Asked Questions

What is the minimum loan for a commercial mortgage?

Most specialist commercial lenders start from £150,000, though some high-street lenders have higher minimums. We arrange commercial mortgages from £150,000 to £150m+.

Can I get a commercial mortgage with bad credit?

Yes, specialist and challenger bank lenders will consider adverse credit, CCJs, and previous defaults on a case-by-case basis. The rate will typically be higher and the maximum LTV lower, but many cases with credit issues can be placed with the right lender.

How long does a commercial mortgage take to arrange?

Six to twelve weeks is typical for a standard case from application to completion. Complex transactions, specialist assets, or cases involving planning considerations can take longer.

Can I buy commercial property through a pension fund?

Yes, SIPP and SSAS pension funds can purchase commercial property. This is a specialist area with its own tax and regulatory considerations. We work with lenders experienced in SIPP/SSAS commercial mortgage lending.

Is a commercial mortgage regulated?

Most commercial mortgages are unregulated. If more than 40% of the property is residential by floor area or rental income, the loan becomes regulated and FCA consumer protection rules apply.

Does Platinum Global charge a broker fee?

No broker fee on facilities of £500,000 or above. For smaller loans, any fee is disclosed upfront before you proceed.

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About Us

Platinum Global Bridging Finance is a distinguished high-net-worth finance broker. We specialize in providing tailored financial solutions, including Property Bridging Finance, Development Finance, Single Stock Loans, Margin Stock Loan, Crypto Finance, Crypto Backed Loans and Commercial Property Finance tailored to meet the diverse needs of our clientele seeking robust financial lending solutions.

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Commercial Mortgages Gerard Ward 4 July 2026

Commercial Mortgages