A commercial mortgage is a loan secured on a commercial property, such as an office, shop, warehouse, workshop or mixed-use building. You can use one to buy premises for your business, to buy a property as an investment, or to refinance or release capital from a property you already own. At Sadi's Commercial Finance we compare lenders across the market to find terms that fit your property, your business and your plans.
Commercial mortgage rates in the UK
Commercial mortgage rates depend on the lender, the type of property, the loan size, how much you borrow against the value, and how strong the business or tenant is. As a general guide, owner-occupier deals typically price lower than investment deals:
| Type | Typical rate range | Typical loan to value |
|---|---|---|
| Owner-occupied (your business uses the property) | Roughly 5.5% to 7.5% fixed | Often 70% to 80% |
| Commercial investment (let to tenants) | Roughly 6% to 9% | Often 65% to 75% |
These are indicative ranges only, not an offer. Actual rates vary by lender and change with the market and the Bank of England base rate. Variable and tracker products are usually priced as a margin over a reference rate. To estimate your own monthly payment and deposit, try our commercial mortgage calculator.
What affects your rate?
- Loan to value (LTV): the lower the amount you borrow against the property's value, the better the pricing tends to be.
- Type of use: a profitable business occupying its own premises is usually seen as lower risk than an investment property that may have empty periods.
- Tenant strength and lease length (for investment property).
- Business accounts and trading history (for owner-occupied).
- Property type and condition: standard offices, shops and warehouses are generally easier to finance than specialist or run-down properties.
- Loan size and term.
How much deposit do you need?
Most lenders want a deposit of around 20% to 30% for owner-occupied property and around 25% to 35% for investment property, depending on the case. A larger deposit usually means a lower rate and more lender choice.
Owner-occupied or investment: which one are you?
Owner-occupied: your business will operate from the property. Lenders look closely at your trading accounts and affordability.
Investment: you will rent the property to tenants. Lenders look at the rental income, the tenant and the lease, and usually test whether the rent covers the repayments.
If you are buying through a limited company or SPV, tell us early, because it affects which lenders can help.
How to apply for a commercial mortgage
- Talk to us. We review the property, your business and what you need.
- Prepare your documents. Usually recent accounts, bank statements, ID, details of the property, and details of any existing borrowing.
- We approach suitable lenders and compare terms, fees and conditions for you.
- Valuation and legal work. The lender values the property and solicitors handle the legal process.
- Completion. Funds are released and the purchase or refinance completes.
For a more detailed walkthrough, read our guide: How to Get a Commercial Mortgage in the UK.
Who we help
- Businesses buying their own premises
- Investors buying let commercial property
- Retailers: see Commercial Mortgages for Retailers
- Property owners refinancing or releasing capital
- Short term needs before a longer mortgage: see Bridging Loans
See a real example: Office Investment Secures £1.2M Commercial Mortgage.
Ready to talk? Speak to a specialist or explore our commercial property finance service.
Frequently asked questions
What is a commercial mortgage?
A loan secured on a commercial property, used to buy, refinance or release capital from premises or investment property.
What are typical commercial mortgage rates in the UK?
Roughly 5.5% to 7.5% for owner-occupied property and 6% to 9% for investment property, depending on the lender, the loan to value and the strength of the case. These are indicative only.
How much deposit do I need?
Typically 20% to 30% for owner-occupied property and 25% to 35% for investment property.
How long does a commercial mortgage take?
It varies, but allow several weeks from application to completion. Valuations and legal work are often the slowest parts.
Can I get a commercial mortgage through a limited company?
Yes. Many commercial mortgages are arranged through limited companies or SPVs. Tell us at the start so we choose suitable lenders.
Can I get a commercial mortgage with bad credit?
Sometimes. Specialist lenders may consider adverse credit, usually with a lower loan to value or a higher rate.
Is a commercial mortgage the same as a business loan?
No. A commercial mortgage is secured on property and usually has a longer term. Business loans are generally unsecured or secured on other assets and are shorter.