Get mortgage happy. 020 8517 1141

Commercial mortgages

Commercial mortgages provide businesses with long-term financing to purchase or refinance real estate.

With competitive rates and flexible terms, your company can acquire the ideal property to expand operations and enhance productivity or generate rental income as an investment.

Get advice on...

You are one call away from financing your project.

Call us on

020 8517 1141

You could borrow up to £{{ total.toLocaleString() }}

Your monthly payments will be £{{ finalMortgage.toLocaleString() }}

Total stamp duty due will be £{{ stampduty.toLocaleString() }}

Get the capital to grow your investments.

What is a commercial mortgage?

A commercial mortgage can provide finance for 2 types of business investments:

  • One is a commercial mortgage that can be used to purchase a property that will be used for your own business.
  • The other is a commercial mortgage for investment, which is a loan that can be used to purchase any property(ies) with the goal of providing rental income – commercial or residential.

The commercial finance investment can be used to refinance a residential property portfolio with the goal of having only one mortgage for many properties at the same time.

Commercial mortgages are not regulated by the FCA (Financial Conduct Authority), but an experienced broker like Home of Specialist Finance can help you minimise any risk to your investment. This also means that many lenders have the flexibility to support poor credit applications.

A limited company buy-to-let mortgage is often used by businesses looking to purchase a residential investment property, but many business owners switch to a commercial mortgage when their portfolio value exceeds the maximum value possible with this mortgage type.

Commercial mortgage rates

Interest rates can be fixed or variable, and both capital and interest and interest-only options.

Many high street lenders would prefer a capital and interest repayment strategy, but most of specialist lenders will offer interest-only terms. The rates for owner-occupier purchases tend to be slightly lower than if you’re buying for investment purposes. Interest is also tax deductible on all commercial mortgages.

When taking a commercial mortgage on an interest-only basis, you’ll need a robust repayment vehicle, which is pre-agreed by the lender before the mortgage offer is made.

This is often through the resale of the property, but some lenders will look at the sale of other assets or investment portfolios.

You could borrow up to £{{ total.toLocaleString() }}

Your monthly payments will be £{{ finalMortgage.toLocaleString() }}

Total stamp duty due will be £{{ stampduty.toLocaleString() }}

We have access to the Whole of the Mortgage Market

Commercial mortgages explained

Commercial mortgages can be used for the purchase or remortgage of any residential or commercial investment property. If the building is mixed-use or you intend to convert it to mixed-use in the future, you’ll need a semi-commercial mortgage.

As an investor, the opportunity for rental income is incredibly broad and could include any of the following:

  • Industrial – factories, warehouses, plant storage
  • Social need – care homes, hospitals, schools, doctor’s surgery, dentist or vets
  • Leisure – hotels, restaurants, sports facilities
  • Agricultural – farmland and buildings
  • Office buildings
  • Retail shops and shopping centres
  • Warehouses and factories
  • Multi-unit Freehold blocks and HMO (house of multiple occupancy) residential
  • Schools and nurseries
  • Land for development


Lenders tend to stick to certain niches within commercial investment mortgages, so some will prefer retail or leisure premises purchases, whereas others may specialise in industrial or care homes.

You could borrow up to £{{ total.toLocaleString() }}

Your monthly payments will be £{{ finalMortgage.toLocaleString() }}

Total stamp duty due will be £{{ stampduty.toLocaleString() }}

Commercial mortgages criteria

Commercial mortgages are bespoke products. The term length can vary quite dramatically from as little as 3 years to a 25-year term.

If you plan to use the property for your own business, the LTV (loan to value) offered will vary depending on the value and type of the property, your trading history and your deposit size, but most lenders offer a maximum of around 75% LTV. Lenders will typically be looking for a minimum trading history of 2-3 years, but there are lenders willing to consider applications from new businesses if they provide additional collateral.

If you intend to rent out a commercial property, most lenders use an RTI (rent to interest) calculator to decide on investment loans. This means that the loan size will usually be based on the income potential of the investment property, similar to how buy-to-let mortgages are calculated. Most lenders will be looking for the property to yield at least 125-145% of the value of your repayments, although some lenders ask for almost 200%.

For high-value commercial investments, such as a large shopping or leisure complex, future financial projections may be required. This is especially the case if you are a less experienced commercial landlord. Those with little or no experience of investing in commercial property as a landlord may also have to provide additional security on their borrowing.

Why invest in commercial property?

Even in today’s work-from-home world, a high percentage of businesses still need some form of premises to operate from, whether that’s simply a distribution plant or a full commercial site with elements of industrial, office and retail property.

Investing in commercial property can be a fantastic wealth development tool, a way for you to direct your funds to the most profitable investments, as well as secure you the most competitive finance to get started.

If you’re already a residential landlord, commercial investment property can be an excellent way to diversify your income, resulting in a more robust portfolio. It’s also possible in some circumstances to take out a commercial portfolio mortgage to cover the cost of your entire investment portfolio.

You could borrow up to £{{ total.toLocaleString() }}

Your monthly payments will be £{{ finalMortgage.toLocaleString() }}

Total stamp duty due will be £{{ stampduty.toLocaleString() }}

What is a Semi-Commercial mortgage?

A semi-commercial mortgage is used to purchase or remortgage mixed-use property. There are a number of circumstances where this may apply, for example, a pub with residential space above.

You will also need a semi-commercial mortgage if you are buying either commercial or residential property where you intend to change an element of the property use. For example, a residential house that you intend to live in, but also convert an aspect of to run a face-to-face business, such as a beauty salon.

You could borrow up to £{{ total.toLocaleString() }}

Your monthly payments will be £{{ finalMortgage.toLocaleString() }}

Total stamp duty due will be £{{ stampduty.toLocaleString() }}

What costs and fees are payable on a commercial mortgage?

The fees payable on a commercial mortgage are similar in nature to a residential mortgage but tend to be higher due to the commercial aspect of the purchase. For example:

  • Deposit – typically 25-40% of the property value, although some lenders offer a higher LTV (loan to value). Lenders may be willing to consider higher LTV lending when additional collateral is used, such as other business assets or property
  • Arrangement fees – varies by lender but can be 0.5-2.5%
  • Legal fees – costs vary based on the property value, and the borrower must cover both their own and the lender’s fees
  • Valuation fees – varies depending on the value of the asset
  • Stamp duty – commercial purchases over £150k (2%) elements over £250k (5%)

Commercial mortgages remain a flexible and competitive financing option for businesses looking to purchase or refinance commercial property.

If you want to expand operations, upgrade facilities, or have your own space, commercial mortgages should be strongly considered as a way worth exploring.

Commercial Finance is arranged by introduction only.
Contact us to get in contact with our sister company, Home of Specialist Finance.

Commercial Mortgage FAQs

Can I get a commercial mortgage for my start-up business?

Yes, it’s certainly possible. There may be additional criteria to meet, such as offering a projected business plan, and there is often a greater deposit or security requirement for new businesses.

Can you take out a commercial mortgage on leasehold property?

There are fewer lenders willing to consider leasehold commercial purchases. However, those that do will typically have a minimum lease length in line with non-commercial mortgages of about 70 years.

It may be possible to secure finance on a shorter leased property if additional collateral is offered.

Is it possible to get a regulated commercial mortgage?

Getting a regulated mortgage is not typical for commercial mortgages. However, there may be very specific semi-commercial mortgages whereby a regulated loan is available. This would be where a mixed-use property had more than 40% residential space. For example, a home-based dental practice or flat above a retail unit may have this split.

How do I calculate commercial rental yield?

Understanding the potential profit achievable is a key factor in choosing the right commercial investment property for you. To calculate the gross rental yield, use the potential annual rent divided by the property value x 100.

For example: with an annual rent of £20,000, on a property value of £250,000, your return would be 8% - 7% or higher is considered to be a healthy yield. There are regional variances as to what is a profitable yield.

Can I get a 100% commercial investment mortgage?

It’s unusual to find a 100% LTV mortgage for any type of investment property. However, it is possible in some circumstances where additional security can be provided. For example, using another property from your portfolio as collateral. Contact an experienced commercial mortgage broker with access to specialist lenders to find out the best lender for your situation.

Are the rules different from buy-to-let mortgages?

Buy-to-let mortgages work in a similar way to commercial investment mortgages. In fact, a buy-to-let mortgage is strictly a type of commercial investment mortgage, as it’s used purely for profit.

Both loans are determined by a mixture of property value and type, experience and personal circumstances and deposit size, as well as the potential rental yield. However, commercial mortgages are often more suited to commercial use properties as buy-to-let lenders only lend on residential property.

Get a free same-day mortgage quote

    By selecting the box, you acknowledge that you have read and understood our privacy notice and consent to its terms.

    Remember | Your home may be repossessed if you do not keep up repayments on your mortgage.
    Commercial mortgages are not usually regulated by the Financial Conduct Authority.

    Privacy notice

    HOME OF MORTGAGES will be what is known as the ‘controller’ of the personal data you provide to us. We only collect basic personal data about you which does not include any special types of information or location-based information.

    Why do you need my data and what will it be used for?

    We need to know your basic personal data so we can make contact with you and respond to your message, request or query. All the personal data we process is processed by our staff in the UK.

    Who is my data shared with?

    Your data will only be shared with third parties if this is necessary to respond to your request. If this is the case, we will seek your permission before passing on your details.

    How long do you keep my data for?

    We may store your data for up to six years past the end of any business relationship, after which time it will be securely destroyed. If you would no longer like us to process your data at any time, you have the right to object to processing of your data. To do this, please contact

    What are my rights?

    You have the right to object to the processing of your data. You also have the right to request access to your data at any time. You have the right to rectification and/or erasure of personal data or restriction of processing. If you wish to raise a concern related to how we have handled your personal data, you can contact us to have the matter investigated at If you are not satisfied with our response or believe we are processing your personal data not in accordance with the law, you can complain to the information commissioner’s office: