large commercial mortgages

What counts as a large commercial mortgage?

Large commercial mortgages begin at £1,000,000 and are used to finance substantial commercial property purchases or refinances. These are not mass-market products. They suit borrowers with proven track records, institutional backing, or owner-occupier requirements at scale.

Properties financed include large office buildings (multi-storey city centre and out-of-town), retail parks, industrial estates, mixed-use developments, hotels, care homes, multi-let commercial blocks, student accommodation, and healthcare facilities. The key requirement is that the property generates reliable rental income or supports established owner-occupier operations.

How large commercial lending differs

Large commercial mortgages work differently from smaller facilities. Lenders at this level are not high street banks; they are specialist commercial lenders, insurance companies, and pension funds with deep expertise in portfolio management and risk underwriting.

Terms are more negotiated. Rather than applying a standard rate, a lender will assess your specific deal: property quality, tenant strength, lease length, financial performance, and your track record. This means your mortgage is structured to fit your business, not forced into a standard product.

Loan covenants become more common at this level. A lender may require quarterly financial reporting, restrictions on disposing of the asset, or maintaining certain insurance or maintenance standards. These protect the lender's security but are entirely standard in institutional lending.

Interest-only is far more common. Many borrowers prefer interest-only to maximise cash flow and maintain flexibility for reinvestment or capital calls. Lenders accommodate this on properties with strong rental income and proven tenant covenants.

LTV and indicative rates

Large commercial mortgages typically offer 60% to 70% loan-to-value, with specialist lenders reaching up to 80% on prime properties with exceptional tenant quality and long lease terms. The stronger your DSCR and tenant covenant, the more flexibility lenders will offer on LTV.

Indicative rates range from around 5.5% to 8% depending on property type, DSCR, loan size, and lender appetite. Interest-only facilities command slightly higher rates. Arrangement fees typically run 1% to 2% of the loan amount. These figures are indicative and subject to lender assessment.

Which lenders write £1m+ commercial mortgages in the UK?

Large commercial mortgages come from four lender groups: the high street banks (Barclays, HSBC, NatWest, Lloyds) for low-geared deals to established covenants; challenger banks including Allica Bank, Shawbrook, Aldermore, and Cambridge & Counties, which write most of the £1m to £10m market; specialist and institutional lenders, insurance companies, and debt funds above that; and private banks where the borrower's wider wealth supports the deal.

Which group fits depends on the asset and the gearing. A £2m industrial unit let to a strong tenant at 60% LTV is a contested deal the high street and challengers will both price. A £6m multi-let office with short leases belongs with the specialists. Above £10m the process changes character entirely: term sheets, negotiated covenants, and lenders who are not accessible through standard channels at all. More than half of the large commercial cases we place complete at the challenger tier, where speed and flexible underwriting are usually worth more than the last 25 basis points of rate.

Lender names correct at time of review, July 2026. Lender appetite at scale changes frequently.

Owner-occupier versus investment

Large commercial mortgages suit both scenarios. For owner-occupiers (established businesses occupying their own premises), lenders assess your business performance, tenure, and ability to maintain the property. DSCR is less stringent but your business accounts carry high weight in underwriting.

For investment properties, DSCR becomes critical. This ratio compares annual rental income to annual debt payments. A property generating £280,000 annual rent on a £2,100,000 facility at 7% interest costs approximately £147,000 annually in interest. That gives a DSCR of 1.90x, which is strong. Lenders typically require a minimum of 1.25x to 1.35x, but higher DSCR improves rates and terms.

What lenders assess at scale

Large commercial lending involves rigorous underwriting. Lenders examine multiple factors.

• DSCR: Annual net rental income divided by annual debt payments. Minimum 1.25x to 1.35x depending on lender and property type.
• Tenant covenant: The creditworthiness of your tenants. Prime tenants with long leases materially improve your terms.
• WAULT: Weighted average unexpired lease term. Longer WAULT reduces refinancing risk for the lender.
• Location and use: Prime locations and essential-use properties (healthcare, industrial logistics) carry lower risk.
• Planning and environmental: Clear planning status and no environmental liabilities are required. Phase 1 environmental surveys are standard.
• Structural condition: A detailed structural survey is mandatory. Major defects can delay or limit lending.
• Your track record: Lenders want evidence of successful property ownership, management, and debt servicing.

The application process

Worked example

Frequently asked questions