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OMB guide 5 of 16 · 2027 edition

Commercial Mortgages, Demystified

Financing premises, investment property or expansion: how commercial lending is assessed and priced.

Written by the OMB team · reviewed by Akhil Mair, Managing Director, CeMAPUpdated October 2026How we write and check our content

In this guide
  • How commercial mortgages differ from residential lending
  • What drives the rate you are offered
  • A fictional, illustrative case study
Get all 16 guides as PDFsCommercial mortgages

How commercial mortgages work

A commercial mortgage funds the purchase or refinance of property used for business, from an owner-occupied shop or office to a semi-commercial building or an investment property let to tenants. There is no single published rate: pricing is agreed case by case, based on the business's accounts, the property and the strength of any tenant.

3.75%Bank Rate, held in September 2026: many commercial loans are priced as a margin above it
Up to 75%Typical maximum loan-to-value for strong applications
Up to 25 yrsTypical maximum term for a commercial mortgage

The process

  1. Define what you need. Purchase, refinance or expansion: the purpose shapes which lenders are relevant.
  2. Prepare your financials. Two to three years' accounts, tax returns and bank statements let lenders assess affordability quickly.
  3. Property assessment. The lender values the property and, for investments, reviews the lease and tenant.
  4. Negotiation and offer. Rates, fees, covenants and terms are individually negotiated, so expert presentation matters.

What Moves Your Rate

Commercial pricing depends on the property type, the loan-to-value, the strength of the business or tenant, and whether the rate is fixed or variable. Established businesses with strong cash flow and larger deposits get the keenest pricing. Owner-occupied premises often price better than pure investments, and semi-commercial property (for example a shop with a flat above) sits between residential and commercial lending.

Owner-occupier or investment?

Buying the premises your business trades from is usually the simpler application: lenders assess affordability from your trading accounts. Buying to let to another business is assessed on the rent and the tenant's covenant strength, much like commercial buy-to-let.

Regulation

Most commercial mortgages are not regulated by the Financial Conduct Authority, so some protections, such as access to the Financial Ombudsman Service for the loan itself, may not apply. We will always tell you whether a loan is regulated before you proceed.

Illustrative example · not a real client

Buying the premises, not renting them: a fictional case study

Amara runs a growing physiotherapy clinic from rented premises in Birmingham and wanted to stop paying rent. With five years of strong accounts, her broker arranged a commercial mortgage at 70% loan-to-value on a £350,000 unit, turning her monthly rent into repayments that build equity in a property her business owns.

Names, figures and circumstances are fictional and illustrative only. They do not represent an actual client of Our Mortgage Broker Limited.

Buying, refinancing or expanding your premises?

Speak to a CeMAP-qualified OMB adviser: whole-of-market advice, with any fee confirmed in writing before you proceed. Read more about commercial mortgages.

Start your enquiry 0203 971 1234

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Your home may be repossessed if you do not keep up repayments on your mortgage. Most buy-to-let and commercial mortgages are not regulated by the Financial Conduct Authority. Our Mortgage Broker Limited is authorised and regulated by the Financial Conduct Authority (FRN 944663). Registered in England and Wales, company no. 11358646. Registered office: 23 Berkeley Square, Mayfair, London W1J 6HE. There may be a fee for mortgage advice: we may charge up to 1% of the loan amount, and our typical fee is £500. Your fee agreement sets out the exact fee and when it is payable (at decision in principle, application or mortgage offer); fees are not refundable once due. We usually also receive commission from the lender. This guide is general information only and is not personal advice. Case studies are fictional, illustrative examples and do not represent real clients. Rates, tax and regulatory information are correct as at October 2026 and may change, including at the Autumn Budget on 28 October 2026.