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A commercial mortgage is a long-term secured loan used to buy or refinance your business’s trading premises — the office, warehouse, factory, retail unit, pub, hotel, surgery or care home you operate from. UK commercial mortgages typically run 15–25 years, with rates from ~Bank of England base + 2.5% for owner-occupier deals.
A non-exhaustive snapshot of the most common commercial mortgages use cases we see across UK SMEs in our broker panel.
Stop renting and own the unit you trade from — building equity instead of paying a landlord.
Move from a maturing 5-year fixed onto a longer term at a better rate, or release equity.
Purchase a tenanted commercial property as an investment — an SPV-owned office block, warehouse, retail park, etc.
A practice (vet, dental, GP), pub, hotel, restaurant or warehouse buying its own freehold.
Refinance a development loan onto a long-term commercial mortgage once the asset is income-producing.
Re-mortgage a low-LTV commercial property to release cash for business growth.
There are dozens of UK business-funding products. Here’s when commercial mortgages is the right one — and what to consider instead if not.
Every monthly payment buys equity in your premises — rent buys nothing.
Property security typically takes pricing to ~base + 2.5–5.5%, well below unsecured loan rates.
15–25 year amortisation keeps the monthly cost manageable.
Commercial mortgage interest is normally a fully allowable cost against corporation tax.
Closely-related UK SME funding products to consider alongside — or instead of — commercial mortgages.
Plain-English answers to the questions UK SME owners ask us most often about commercial mortgages.
A commercial mortgage is a long-term secured loan used to buy or refinance commercial property — the premises a business operates from (owner-occupier) or a property held as a commercial investment. UK terms typically run 15–25 years, with the lender taking a first legal charge over the property.
Up to 75% LTV for owner-occupiers and up to 65% LTV for investment / buy-to-let commercial property. Some specialist lenders go to 80% LTV for trading businesses with strong covenant strength. There is no fixed upper loan size — it’s LTV-driven.
A typical UK owner-occupier commercial mortgage requires a 25% deposit (i.e. 75% LTV). Investment commercial mortgages typically require a 35% deposit (65% LTV). Stamp duty, legals and arrangement fees come on top — expect to budget another 5–7% of the purchase price for transaction costs.
A standard UK owner-occupier commercial mortgage takes 6–12 weeks from full application to drawdown — longer than residential because of the bespoke valuation and legal due diligence. Bridging loans (3–7 days) are commonly used to bridge a tight purchase deadline before the term commercial mortgage completes.
For an owner-occupier UK trading business at 75% LTV, indicative pricing in 2026 is Bank of England base rate + 2.5% to 5% — so roughly 7–9.5% APR with base at ~4.5%. Investment commercial mortgages tend to price 50–100bps wider.
Difficult but not impossible. Most high-street commercial mortgage lenders want at least 2 years of filed accounts. Specialist lenders will write to startups when the asset is highly let-able (a generic office, retail or industrial unit) and the directors can demonstrate sector experience — usually at a lower LTV (60–65%) and a higher rate.
Yes. The interest on a UK commercial mortgage is a fully allowable trading expense for corporation tax. The capital repayment portion is not tax-deductible (it’s building equity in the asset). Stamp duty and legals are typically capitalised into the property book value.
Every page below feeds the same panel of British Business Bank-accredited GGS lenders. Pick the deep-dive that matches your question, or jump to grants and alternative funding routes.
Important information: The Business Hub is a credit broker, not a lender. We introduce UK businesses to a panel of lenders and finance providers. Business finance products for limited companies (including unsecured loans, merchant cash advances and Growth Guarantee Scheme facilities) are generally not regulated by the Financial Conduct Authority. Any rates or quotes shown are indicative, for information purposes only, and subject to status, lender criteria and separate terms & conditions. Personal Guarantees and Indemnities may be required — under the Growth Guarantee Scheme the borrower always remains 100% liable for the debt. We may receive a commission from lenders, which can vary depending on the lender, product or other permissible factors; the nature of any commission model will be confirmed before you proceed.
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