What is a Commercial Mortgage?
A commercial mortgage is a long-term loan secured against commercial property — used by businesses to purchase the premises they trade from, or by investors to purchase commercial property for rental income. UK commercial mortgages typically run from 5 to 25 years with loan-to-value ratios of 60–75% and are available on fixed or variable interest rates. Seven Hills Capital Group searches the whole commercial mortgage market — including specialist lenders and challenger banks — to find the most competitive terms for your property and business profile.
How Commercial Mortgages work in practice
A long-term loan secured against commercial property. Build equity, secure your trading premises, or invest for rental income. We search every lender to find the right deal.
How it works
You identify the commercial property you wish to purchase
A lender assesses the property value, your business financials and the property's income-generating potential
A loan-to-value ratio is agreed — typically 60–75% of the property value
The commercial mortgage is secured against the property
Monthly repayments are made over the agreed term — interest only or capital repayment
Who It Is Right For
- Business owners who want to purchase their trading premises rather than continue renting.
- Commercial property investors purchasing properties for rental income.
- Businesses looking to refinance an existing commercial mortgage onto more competitive terms.
Pros
- Builds long-term equity in your business property — you own an asset, not a tenancy
- Monthly mortgage cost can be comparable to or lower than commercial rent
- Fixed rate options provide long-term certainty on one of your largest business costs
- Property can be used for future refinancing or equity release as values grow
Things To Consider
- Significant deposit required — typically 25–40% of the commercial property value
- Longer approval process than most business finance — typically 4–12 weeks to completion
- Commercial property is at risk if mortgage repayments are not maintained
- Early repayment charges typically apply on fixed rate commercial mortgage products
Why Use Seven Hills Capital Group
The commercial mortgage market includes high street banks, challenger lenders, specialist commercial mortgage lenders and private finance providers. Rates, LTV ratios and lender appetite vary significantly. Seven Hills Capital Group will search the whole UK commercial mortgage market to find the most competitive terms for your specific property type, business profile and required loan-to-value.
Frequently Asked Questions
What deposit do I need for a commercial mortgage?
Most commercial mortgage lenders in the UK require a deposit of 25–40% of the property value — giving a loan-to-value ratio of 60–75%. Some specialist commercial mortgage lenders will consider up to 80% LTV for strong borrowers with good rental income coverage. Seven Hills Capital Group will identify the highest realistic LTV for your situation.
What types of commercial property can be mortgaged?
Offices, retail units, warehouses, industrial units, mixed-use buildings, hotels, care homes, pubs, restaurants and other commercial premises are all routinely financed. Some specialist commercial mortgage lenders focus on specific property types and can offer better terms as a result.
What commercial mortgage rates are available in the UK?
Commercial mortgage rates currently range from approximately 4% to 9% for standard commercial properties depending on the lender, LTV, property type, term and business profile. Seven Hills Capital Group will compare the full UK commercial mortgage market to find the most competitive rate for your situation.
Can I get a commercial mortgage for an investment property?
Yes. Commercial investment mortgages are available for properties purchased to generate rental income. The lender assesses whether the rent sufficiently covers the mortgage repayments. Seven Hills Capital Group works with specialist commercial investment mortgage lenders for this type of transaction.
How is a commercial mortgage different from a residential mortgage?
Commercial mortgages are assessed primarily on the business's financial position and the property's income potential rather than the borrower's personal income. They typically require higher deposits, carry higher rates and have shorter maximum terms than residential mortgages.
Not sure if Commercial Mortgages is right for your business?
Our team will tell you honestly in one conversation whether this is the right product for your situation — and if not, what is.