Commercial Mortgage Rates UK 2026
Commercial mortgage rates in the UK in 2026 range from around 5.5% to 9.5%. Owner-occupier deals price from roughly 5.5% to 7.5% fixed, investment property from 6% to 9%, and variable products sit at margins of 2% to 5.5% over the Bank of England base rate of 3.75%. Where you land depends on the asset, the loan-to-value, and the strength of the income behind the loan.
Rates on this page reviewed 3 July 2026, with base rate at 3.75%. We check the bands after each MPC decision. Always speak to your broker for live pricing on your specific case.
What are commercial mortgage rates in the UK in 2026?
The UK commercial mortgage market in July 2026 prices in bands set primarily by borrower type and loan-to-value. There is no single "commercial mortgage rate" the way there is a best-buy table for residential: every commercial loan is individually underwritten, and the quoted rate reflects the lender's view of the asset, the income, and you.
| Borrower type | Indicative rate (2026) | Typical LTV | Notes |
|---|---|---|---|
| Owner-occupier (strong trading business) | 5.5%-7.5% fixed | Up to 75%-80% | Two to three years of accounts, healthy adjusted EBITDA. Professional practices can reach 100% LTV. |
| Commercial investment (let property) | 6%-9% | Up to 65%-75% | Priced on tenant covenant, lease length, and DSCR. Longer leases to stronger tenants price keenest. |
| Semi-commercial / mixed-use | 6%-8.5% | Up to 75%-80% | Residential element improves pricing. See our semi-commercial rates guide. |
| Variable / tracker (all types) | Base + 2% to base + 5.5% | As above | Margin over the 3.75% base rate. Suits borrowers planning early repayment or refinance. |
The advertised "from" rates apply to the strongest cases: low LTV, strong covenant, clean credit, prime asset. Most real-world offers land in the middle of the band once the lender has priced the actual risk. Rates below 5.5% exist in 2026, but almost exclusively on large, low-geared loans to established businesses at the high street banks.
The Bank of England base rate stands at 3.75% as of July 2026, held at the June meeting after the December 2025 cut from 4%. Markets currently expect the rate to hold for the remainder of 2026, so commercial pricing is likely to move on competition and swap rates rather than base rate falls in the near term.
How do fixed and variable commercial mortgage rates compare?
Fixed rates give payment certainty for two to ten years and currently start around 5.5% for strong owner-occupiers. Variable rates track base at a set margin, so a "base plus 2.5%" deal costs 6.25% today and moves with every MPC decision.
The decision is less about predicting rates and more about matching the product to your plan. If you intend to hold the property and the business long term, a five-year fix removes payment risk from your cash flow forecast. If you expect to sell, refinance, or restructure within two or three years, a variable deal, or a short fix with soft early repayment charges, usually costs less overall because you avoid paying an ERC to leave a long fix early. Early repayment charges on commercial fixes commonly run 3% to 5% in the early years and step down over the fixed period. Read that schedule before you sign, not when you come to sell.
What deposit do you need for a commercial mortgage?
Most commercial mortgages need a deposit of 25% to 40%. Owner-occupiers borrowing against premises they will trade from reach 75% to 80% LTV with most lenders, so a 20% to 25% deposit. Commercial investment property typically caps at 65% to 75% LTV, so a 25% to 35% deposit, with the exact figure driven by asset class and tenant strength.
There are two useful exceptions. Professional practices, including dental, medical, veterinary, and some legal and accountancy firms, can borrow up to 100% of the freehold value because lenders treat the underlying business income as exceptionally reliable. And on any deal, additional security, such as an unencumbered property or a debenture over a strong business, can push effective gearing above the standard caps. Our owner-occupier commercial mortgage page covers the 100% routes in detail.
What criteria do lenders use to price a commercial mortgage?
Five factors set your rate, and they compound.
Debt service cover ratio. The core affordability test. Net rental income, or adjusted business profit for owner-occupiers, divided by the annual mortgage cost, stress-tested at a rate above the pay rate. Most lenders want at least 1.25x; some sectors and challenger banks want 1.4x or higher. A DSCR comfortably above threshold earns pricing at the bottom of the band. Our DSCR guide works through the maths.
Loan-to-value. Sub-60% LTV is where the sharpest pricing lives. Every step up in gearing moves the rate, and above 75% the lender pool thins fast.
Asset quality and sector. A modern industrial unit lets quickly if the lender ever has to recover; a tertiary retail unit may not. Industrial and logistics price keenest in 2026, offices and retail carry a premium, and operational assets such as hotels and care homes are underwritten on the business as much as the building.
Covenant. For investment deals, who the tenant is and how long the lease runs. For owner-occupiers, the trading history: two to three years of accounts, the trend in turnover and margin, and the adjusted EBITDA after add-backs.
Borrower profile. Experience, existing portfolio, personal guarantees offered, and credit history. Clean profiles price better. Adverse credit does not kill a commercial deal, but it moves it out of the high street and up the rate bands.
Which lenders offer the best commercial mortgage rates in 2026?
The market runs in three tiers, and the cheapest tier for your deal depends on how clean the deal is.
| Tier | Lenders (examples) | Indicative pricing | Best for |
|---|---|---|---|
| High street banks | Barclays, HSBC, NatWest, Lloyds | Lowest rates, from c. 5.5% | Established businesses, strong accounts, low LTV, patience with an 8 to 12 week process |
| Challenger banks | Allica Bank, Shawbrook, Aldermore, Redwood Bank, Cambridge & Counties | c. 6%-8% | Good deals with a wrinkle: shorter trading history, mixed-use, higher LTV, faster timelines |
| Specialist lenders | Together, InterBay, and others | c. 7%-9.5% | Complex assets, adverse credit, unusual income, deals the banks decline |
The blunt version: the high street is cheap and slow, the challengers are the workhorses of the 2026 market, and the specialists exist for deals with a story. More than half of the commercial cases we place land at the challenger tier, not because the high street declined them, but because the challenger's speed and flexibility was worth 50 to 75 basis points to the client. A rate is not a deal until it completes.
Lender names and rate bands correct at time of review, July 2026. Lender criteria and pricing change frequently.
How does the rate translate into monthly payments?
Worked example: £800,000 owner-occupier purchase
Property: Industrial unit, purchase price £1,070,000 | Loan: £800,000 | LTV: 75%
Rate: 6.25% fixed for 5 years | Term: 20 years, capital repayment
Monthly payment: approximately £5,846 | Annual debt service: approximately £70,150
DSCR test: the business needs adjusted EBITDA of at least £87,700 (1.25x) to pass affordability, stress-tested higher by some lenders.
Run your own figures, including the maximum loan your income supports, on our commercial mortgage calculator. It models both investment DSCR and trading-business EBITDA routes.
How do you get the best commercial mortgage rate?
The rate you are quoted reflects the application you present, not just the deal itself. Four things move the needle.
Most of the gap between the advertised rate and the rate you are offered is lender selection rather than negotiation. That is the job a commercial mortgage broker does, and on our cases it is fee-free because the lender pays on completion.
Fix the DSCR before you apply. Check the maths yourself: net income divided by stressed annual payments. If you are below 1.25x, restructure before approaching lenders, with a longer term, a part interest-only structure, or a smaller loan. A marginal DSCR presented to the wrong lender becomes a decline on your record.
Have the financials ready. Have your accountant produce the adjusted EBITDA workings before you go to a lender, not after. Every week of delay between terms and full submission is a week for pricing to move or appetite to change.
Put the deal in the right tier. The cases we find hardest to rescue are not the complex ones; they are clean deals that spent two months at a high street bank that was never going to do them, and arrive with a deadline the sharpest lenders can no longer meet.
Create competition. Two or three written indicative terms change the conversation. Lenders hold their best pricing for contested deals. A broker with comprehensive access to the market runs that process in parallel rather than sequentially, which is the difference between a two-week and a two-month terms stage.
Commercial mortgage rates: frequently asked questions
What are commercial mortgage rates in the UK in 2026?
UK commercial mortgage rates in 2026 typically range from 5.5% to 9.5%. Owner-occupier deals price from around 5.5% to 7.5% fixed, investment property from 6% to 9%, and variable products at margins of roughly 2% to 5.5% over the 3.75% base rate. The rate depends on asset type, LTV, and income strength.
What deposit do I need for a commercial mortgage?
Usually 25% to 40%. Owner-occupiers reach 75% to 80% LTV, and professional practices such as dentists and doctors can borrow up to 100% of the freehold. Investment property typically caps at 65% to 75% LTV depending on the asset and tenant covenant.
Are commercial mortgage rates fixed or variable?
Both. Fixes of 2 to 10 years price from around 5.5% for strong owner-occupiers and give payment certainty. Variables track base rate at margins of roughly 2% to 5.5% and suit borrowers planning to refinance or repay early. Check the early repayment charge schedule on any fix before committing.
Which lenders offer the best commercial mortgage rates?
High street banks (Barclays, HSBC, NatWest, Lloyds) offer the lowest headline rates with the strictest criteria and slowest process. Challenger banks (Allica, Shawbrook, Aldermore, Redwood, Cambridge & Counties) price slightly higher with more flexibility. Specialists (Together, InterBay) take the complex cases. The right tier depends on the deal.
How does DSCR affect my rate?
Debt service cover ratio is the core pricing input: net income divided by the stressed annual mortgage payment. Most lenders want at least 1.25x. Comfortably above that and you access the bottom of the rate band; marginal and the rate rises or the loan shrinks.
Do owner-occupier and investment mortgages price differently?
Yes. Owner-occupier deals price lower, around 5.5% to 7.5% in 2026, because the lender underwrites a trading business with accounts. Investment deals price 6% to 9% because repayment depends on tenants, leases, and re-letting risk.
What fees come with a commercial mortgage?
An arrangement fee of 1% to 2% of the loan, a valuation fee scaling with the asset (often £1,500 to £5,000 plus), lender legals plus your own, and possibly early repayment charges during a fixed period. FD Commercial charges no broker fee on commercial mortgages; we are paid by the lender.
How do commercial rates compare to residential?
Commercial rates run roughly 1.5 to 3 percentage points above residential. There is no best-buy table: every commercial loan is individually underwritten on the asset, the income, and the borrower, which is why two similar businesses can receive materially different quotes for the same building.
Will commercial mortgage rates fall in 2026?
Base rate is 3.75% as of July 2026 and markets expect it to hold for the rest of the year, so material rate falls are unlikely near term. Fixed pricing already reflects the expected rate path. Waiting for cuts usually costs more in delayed acquisition than it saves in rate.
What is the minimum loan FD Commercial arranges?
£250,000, with no upper limit, across England, Scotland, and Wales. No broker fee applies on commercial mortgages; our income comes from lender commission. Terms in principle are typically available within 24 to 48 hours.
Rates and lender criteria are indicative only and subject to change. The rate you are offered will depend on individual circumstances including asset type, loan-to-value, income, and credit profile. Your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it. FD Commercial arranges commercial mortgages from £250,000.
FD Commercial arranges commercial mortgages from £250,000 across England, Scotland, and Wales, with no broker fee. Tell us the asset, the loan, and the income behind it, and we will tell you where the deal prices and which lenders want it.
Call 03300 100315