A commercial mortgage is a loan secured against a property used for business purposes, whether that’s the building your own business operates from or a property you’re purchasing as an investment to let to another business. Terms, interest rates, and deposit requirements differ from residential mortgages and also vary depending on whether the property is owner-occupied or an investment.
We work with a broad panel of lenders, from high street banks to specialist commercial lenders, to find a structure that fits your business and your plans for the property.
| Feature | Owner Occupied | Commercial Investment |
|---|---|---|
| Who uses it | Businesses buying premises to trade from | Investors buying to let to other businesses |
| Typical deposit | Often from 20% to 35% of purchase price | Often from 25% to 40% of purchase price |
| What lenders assess | Business trading history and affordability | Rental income and tenant covenant strength |
| Typical term | Usually 5 to 25 years | Usually 5 to 20 years |
These figures are typical ranges rather than fixed rules. Every lender sets its own criteria, and the right deposit, interest rate, and loan term for your circumstances will depend on the property, your business, and how the finance is structured.
We search across a wide panel of high street banks and specialist commercial lenders, including:
Every lender has a different appetite for property types, business sectors, and loan sizes. That’s why comparing the market properly is so important, rather than approaching just one bank, to help you find the finance solution that best suits your circumstances.
A growing physiotherapy practice had been renting premises for six years and wanted to purchase a larger unit instead of continuing to pay someone else’s mortgage. We arranged an owner-occupied commercial mortgage based on three years of trading accounts, giving the business a fixed monthly repayment instead of rent that increased with every lease renewal.
An experienced property investor wanted to add a retail unit with an established tenant to an existing portfolio. We arranged a commercial investment mortgage that was assessed primarily on the property’s rental income and the strength of the tenant’s lease, rather than the investor’s personal income. This approach suited the way their wider property portfolio had been structured.
It varies by lender and property type, but owner-occupied commercial property purchases often require a deposit of around 20% to 35%, while investment property purchases typically require a slightly higher deposit. The exact amount will depend on the property, the business sector, and your overall financial position.
It’s more challenging without an established trading history, but it’s certainly not impossible. Some specialist lenders are willing to consider newer businesses, particularly where there’s a strong deposit or directors are prepared to provide personal guarantees. We’ll help you understand the most realistic funding options based on your stage of trading.
A residential buy-to-let mortgage is designed for residential properties let to individual tenants, while a commercial mortgage is used to finance properties intended for business purposes, whether owner-occupied or let to a commercial tenant. If you’re considering investing in residential rental property instead, see our Buy to Let Mortgages page.
Both fixed and variable rate commercial mortgages are available. Fixed rates provide certainty over your monthly repayments for a set period, while variable rates follow a base rate and can rise or fall over time. The right option depends on your attitude to risk and how the rest of your business finances are structured.
