Why own rather than rent?
Buying commercial property makes compelling financial sense for established businesses. Monthly mortgage repayments are often comparable to — or less than — equivalent rent, but instead of paying a landlord, you're building equity in an asset. You control your premises, eliminate the risk of lease expiry, and benefit from any capital appreciation.
Commercial mortgage rates explained
Commercial mortgage rates are typically higher than residential rates — reflecting the more complex security and different default risk profile. Most commercial mortgages are priced at a margin over a base rate (Bank of England base rate or SONIA). Indicative rates in 2025 range from approximately 3.5% to 7%+ depending on:
- → Loan to value (lower LTV = lower rate)
- → Property type and condition
- → Business sector and trading history
- → Loan size and term
How much can you borrow? (LTV)
Most commercial mortgage lenders will lend up to 70–75% of the property's value — meaning you need a deposit (or existing equity) of 25–30%. Some specialist lenders will go to 80% for strong credits. Investment commercial mortgages are typically capped slightly lower, with lenders focusing on the rental income coverage ratio.
The application process
Initial assessment — broker reviews your financials and the property, identifies suitable lenders and likely terms.
Decision in Principle — lender issues a DIP based on financial information, confirming their willingness to lend in principle.
Valuation — lender instructs a RICS-qualified commercial valuer. Cost typically £1,000–£3,000+ depending on property.
Formal offer — full credit approval and mortgage offer issued. Legal work begins.
Completion — solicitors exchange and complete. Funds drawn down. Typical timeline: 6–12 weeks from application.
If you do not keep up repayments on a commercial mortgage, your property may be repossessed. Always take independent professional advice before proceeding. Our brokers can arrange expert legal and accounting referrals alongside the finance.
Speak to an Expert →