Buy or refinance business property
Commercial Mortgages
A commercial mortgage is a long-term loan secured on commercial property, such as offices, shops, warehouses, surgeries or mixed-use buildings. Businesses use them to buy their own premises, and investors use them to buy property to let.
Funding Plus compares commercial mortgages from high-street banks and specialist lenders for owner-occupiers and investors.
- Terms up to 25 years
- Owner-occupied and investment property
- Purchase or refinance
Reviewed by the Funding Plus team · Last updated October 2026
Step 1 of 3 · Commercial Mortgages
How much do you need?
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Commercial Mortgages at a Glance
- Amounts
- £100k – £10m+
- Terms
- 3 – 25 years
- Loan to value
- Up to 70% – 75%
- Security
- The property
- Best for
- Buying premises
Typical figures across the market. Your offers depend on your business, the lender and the security available.
How Commercial Mortgages Work
- 1Tell us about the propertyIts type, price or value, and whether you'll trade from it or let it.
- 2Agreement in principleLenders confirm the amount, rate and conditions based on your figures.
- 3Valuation and legal workA RICS valuation and solicitors acting for you and the lender.
- 4CompletionThe lender releases the funds and you take ownership.
How Much Do Commercial Mortgages Cost?
Rates depend on the deposit, the property type, your trading history and, for investments, the rental income. Expect a deposit of at least 25% to 30%, plus valuation and legal costs.
- Interest, fixed or variable
- Arrangement fees, often 1% to 2%
- Valuation and legal fees for both sides
- Early repayment charges on fixed rates
Worked example
Buying a £400,000 unit
- Property price
- £400,000
- Deposit (25%)
- £100,000
- Mortgage
- £300,000
- Rate and term
- 7.5% a year, 20 years
- Monthly repayment
- £2,416.78
- Total interest
- £280,027
Illustrative only, not a quote. Excludes fees, stamp duty and legal costs.
Who Can Get Commercial Mortgages?
- A deposit, usually 25% to 30% or more
- For owner-occupiers: 2 or more years' trading and affordable accounts
- For investors: rental income that covers the payments with a margin
- A property type the lender accepts
- A credit history the lender can accept
What You'll Need to Apply
- 2 to 3 years of accounts
- Details of the property and sale price or valuation
- For investments: leases and rental income
- Assets and liabilities statement for directors
Pros and Cons of Commercial Mortgages
Advantages
- Buying can cost less than renting long-term
- You build equity in the property
- Long terms keep payments affordable
- Fixed rates give certainty
Things to watch
- A large deposit is needed
- The property is at risk if you can't repay
- Slower and more paperwork than other funding
- Exit fees can be high on fixed rates
Types of Commercial Mortgage
Owner-occupied
For premises your business trades from. Affordability is based on your trading figures.
Commercial investment
For property you let to tenants. Affordability is based on the rent.
Semi-commercial
Mixed-use property, such as a shop with a flat above.
Short-term purchase
Need to complete quickly? Bridging can come first, then a mortgage.
See bridging loansCommercial Mortgages vs Other Options
| Option | Best for | Typical speed | Security |
|---|---|---|---|
| Commercial mortgage | Buying or refinancing premises | 4 – 12 weeks | The property |
| Bridging loan | Quick or short-term purchases | 1 – 3 weeks | Property |
| Secured business loan | Raising money against property you own | 2 – 6 weeks | Property |
| Development finance | Building or converting | 4 – 10 weeks | The site |
Who Uses Commercial Mortgages?
Commercial mortgages are common wherever businesses want to own their premises.
Customer story
“[Real customer story for Commercial Mortgages: what they needed, how quickly it was arranged and what it let them do.]”
[Name], [Role], [Business name] · [Amount] commercial mortgage
Commercial Mortgages FAQs
How much deposit do I need?
Usually 25% to 30% of the property's value, sometimes more for specialist property or newer businesses.
Can I buy through a limited company?
Yes. Many businesses and investors buy commercial property in a company or SPV.
How long does it take?
Typically 6 to 12 weeks from application to completion, depending on the valuation and legal work.
Are commercial mortgages regulated?
Most aren't, unless you or a family member will live in part of the property. Take advice if that applies.
Can I use my pension to buy premises?
Some pension schemes (SIPPs and SSASs) can buy commercial property. Speak to a pension adviser.
Related Guides
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