Whether you are purchasing a commercial premises for your business, acquiring an investment property, or refinancing an existing commercial loan, a commercial mortgage is likely to be the largest financial commitment you make. Unlike residential mortgages, the commercial mortgage market is complex, largely unregulated in terms of lender behaviour, and highly variable in pricing. Getting the right structure from the outset is not simply a matter of cost — it can determine whether a transaction completes at all.
At Giles Finance, we are independent commercial mortgage brokers with access to the whole of the UK market. This guide sets out everything you need to know about commercial mortgages in 2026: how they work, how they are priced, what lenders look for, and how we can secure terms that direct approaches to lenders rarely achieve.
What Is a Commercial Mortgage?
A commercial mortgage is a loan secured against a commercial property — any property that is not used as a private dwelling. This includes offices, retail units, warehouses, industrial premises, mixed-use buildings, agricultural land, HMOs, care homes, and leisure properties.
There are two principal categories:
- Owner-occupier commercial mortgages — where the borrower purchases or refinances premises from which their own business operates.
- Commercial investment mortgages — where the borrower acquires a commercial property to let to a business tenant, generating rental income.
Both types are assessed on broadly different criteria. Owner-occupier lending is assessed primarily on the business’s trading performance and ability to service the debt. Investment lending is assessed on the rental income generated or reasonably achievable from the property.
Commercial Mortgage Rates in 2026
Following a period of significant rate volatility between 2022 and 2024, the commercial mortgage market has stabilised considerably. Rates in 2026 are shaped primarily by the Bank of England base rate — which has been subject to measured reductions throughout 2025 — combined with lender-specific margins and risk pricing.
As a broad guide, commercial mortgage rates in 2026 typically fall within the following ranges:
- Strong applications with good quality security and established trading income: from approximately 5.75% to 6.50% per annum.
- Standard applications with good property and acceptable credit profile: 6.50% to 8.00% per annum.
- Complex or adverse credit applications, specialist property types, or higher LTV lending: 8.00% to 10.00%+ per annum.
These figures are indicative. Your actual rate will depend on loan-to-value, property type, lease structure, borrower profile, trading history, and the lender selected. An independent broker’s role is to identify the lender whose pricing model best suits your specific circumstances.
Rates may be fixed or variable. Fixed rates provide certainty over repayment costs for the agreed term. Variable rates, typically linked to SONIA or the base rate with a lender margin, may be lower at outset but carry interest rate risk. For business owners prioritising cash flow predictability, a fixed rate is often the more prudent choice.
Loan-to-Value and Loan Size
Commercial mortgage lenders will typically lend between 60% and 75% of the property value (loan-to-value or LTV), although some specialist lenders will extend to 80% in appropriate circumstances. The higher the LTV, the greater the risk to the lender — and the higher the rate and arrangement fee you should expect to pay.
Minimum commercial mortgage loan sizes typically start from 100,000, with no theoretical upper limit for the strongest applications. Loans of 5 million, 10 million, and above are regularly arranged through specialist lenders and private banks accessible via a whole-of-market broker.
Eligibility: What Do Commercial Mortgage Lenders Look For?
Commercial mortgage underwriting is considerably more subjective than residential mortgage assessment. Lenders will typically examine the following:
For Owner-Occupier Borrowers
- Two to three years of audited accounts or certified management accounts, demonstrating sufficient profit to service the proposed debt.
- Evidence of business viability and trading continuity.
- Personal credit history of the directors or partners.
- Details of existing business debts and liabilities.
- A satisfactory valuation of the property being purchased or refinanced.
For Commercial Investment Borrowers
- The rental income generated by the property — usually assessed at 125% to 145% interest coverage ratio.
- Lease length, tenant covenant strength, and any existing rent reviews or break clauses.
- Property condition and any structural or environmental issues identified in the valuation.
- The borrower’s existing property portfolio and overall financial position.
Unlike residential lending, there is no standardised affordability calculation. Different lenders apply different stress tests, income multiples, and underwriting overlays. This is one of the central reasons why independent broker advice adds material value: the right lender for your application is not always the obvious choice.
Property Types We Finance
At Giles Finance, we arrange commercial mortgages across the full spectrum of commercial property, including:
- Offices and professional premises
- Retail units, high street shops, and shopping centres
- Industrial units, warehouses, and logistics facilities
- Pubs, restaurants, and hospitality premises
- Care homes, nursing homes, and supported living
- Medical and dental surgeries
- Agricultural land and farm buildings
- Mixed-use buildings (commercial and residential)
- HMOs and multi-unit residential blocks valued as commercial assets
If your property type is unusual or your circumstances are non-standard, please contact us directly. Our lender panel includes specialist providers who operate outside the parameters of mainstream commercial lending.
The Arrangement Process: What to Expect
A commercial mortgage transaction typically progresses through the following stages:
- Initial consultation and fact-find — we assess your requirements, the property, and your financial profile.
- Market review and lender selection — we identify the lenders best suited to your transaction and approach them on your behalf.
- Decision in principle — the lender confirms in broad terms that it would be prepared to lend, subject to valuation and full underwriting.
- Formal application — completion of the lender’s application and submission of supporting documentation.
- Valuation — the lender instructs an RICS-qualified surveyor to value the property. The cost is met by the borrower.
- Formal offer — following satisfactory underwriting and valuation, the lender issues a mortgage offer.
- Legal completion — your solicitors and the lender’s solicitors deal with the legal aspects of the transaction.
The typical timeframe from initial enquiry to completion is six to twelve weeks, depending on the complexity of the transaction, the lender’s processing speed, and the progress of legal work. Complex transactions or specialist property types may take longer.
Why Use Giles Finance?
We are authorised and regulated by the Financial Conduct Authority (FCA No. 726857) and have access to the whole of the UK commercial mortgage market. We work with high street lenders, specialist commercial lenders, challenger banks, and private funding lines — many of which are not accessible directly.
Our fee structure is transparent. We will tell you exactly what we charge, when, and why, before you commit to anything. Our objective is to find you the most appropriate financing solution for your specific circumstances — not the most convenient product for us.
Speak to a commercial mortgage specialist today. Call Giles Finance on 0208 088 2211 or request a call back at gilesfinance.co.uk