Commercial Mortgages in 2026: Deposits, LTV and Terms Explained
Rent goes up. Landlords sell. Leases end at the worst possible moment. At some point most established business owners run the numbers on buying their premises instead, and the first two questions are always the same: how much deposit, and what will the bank actually lend?
Here's where the UK market sits in 2026, in plain numbers, and what lenders look for when they assess a commercial mortgage application.
Owner-Occupied vs Investment: Two Different Products
Lenders split commercial mortgages into two camps, and the terms differ meaningfully:
- Owner-occupied: your business trades from the building. Assessed on your accounts and the affordability of the repayments from your profits
- Commercial investment: you're buying to let the property to other businesses. Assessed primarily on the rental income the building generates
Deposits and Loan to Value in 2026
As a general guide across the market, not a quote:
- Owner-occupied: most lenders go to 70 to 75% LTV, with some challenger banks stretching to 80% for strong trading businesses. That means a deposit of 20 to 30%
- Investment property: typically up to around 75%, and lower for interest-only structures
- Terms: anywhere from 5 to 30 years depending on the lender, with high street banks commonly at 25 and some challengers at 30
- Professional practices: dental, veterinary, medical, legal and accountancy firms can access up to 100% funding with some specialist lenders, because their income is seen as unusually stable
One nuance worth knowing: LTV isn't just about whether you qualify, it prices the loan. The difference between borrowing at 60% and 75% LTV can be a full percentage point or more on the rate, which on a £500,000 loan is thousands of pounds a year.
What Rates Look Like
Commercial mortgage pricing moves with the Bank of England base rate, which has held at 3.75% since December 2025. Through 2026 most commercial mortgage rates have sat somewhere in the mid 5s to mid 7s percent, with the sharpest pricing going to strong applications at conservative LTVs.
Treat any rate you read online, including that one, as a moving target. Your rate depends on your accounts, the property, the LTV and the lender's appetite for your sector on the day. Fixed and variable options both exist, and fees (arrangement, valuation, legal) belong in any comparison of total cost.
What Lenders Actually Check
- Accounts: usually two to three years of filed accounts showing the repayments are comfortably affordable from profit
- Bank statements: six months or so, to see the real cash flow behind the accounts
- The property: an independent valuation, plus its condition, location and how easily it could be re-let or resold
- The people: credit history of the business and its directors, and personal guarantees are commonly requested
If the deadline is too tight for a mortgage, or the property needs work before a mainstream lender will touch it, that's the gap bridging finance exists to fill, with the mortgage as the exit.
Thinking about buying your premises?
Tell us about the property and your business and we'll put your case to the commercial mortgage lenders on our panel suited to it, from high street to challenger. Free to use, no obligation.
Check your optionsCommon Questions
Is buying always better than renting?
No, and anyone who tells you otherwise is selling something. Buying fixes your costs, builds equity and gives you control. Renting keeps your capital free and your options open. The right answer depends on your cash position, your growth plans and the local market, and it's a conversation for your accountant as much as a broker.
Can the deposit come from the business?
Deposits typically come from retained business cash, director funds, or sometimes equity in other property the business owns. Lenders will want to see where it's from and that using it doesn't starve the business of working capital.
How long does it take?
Realistically two to four months from application to completion, driven by the valuation and legal work. Start earlier than feels necessary, especially if a lease break is forcing the timeline.
Are commercial mortgages FCA regulated?
Lending to a limited company against commercial premises is generally unregulated business lending. Mortgages involving a borrower's own home are a different, regulated world. CapExpand arranges non-regulated introductions for Ltd companies and LLPs only.
Compare commercial mortgage options
CapExpand introduces you to established lenders from our panel, and a dedicated account manager walks you through deposits, terms and total costs in plain English. Call us on 0333 041 3127 or start with the two-minute form.
Check your optionsCapExpand is a credit introducer, not a lender. We do not provide financial advice, and nothing here is a recommendation. All figures are a general guide, not a quote, and rates change with the market. All funding is subject to status, valuation and lender approval. Commercial mortgages are secured against property, which is at risk if repayments are not maintained.
CapExpand Ltd (Company No. 14433858) is a commercial finance introducer, not a lender. We are not currently authorised or regulated by the Financial Conduct Authority and do not provide financial advice. All information on this page is for educational purposes only. Funding is subject to status and lender criteria. CapExpand will receive a commission from providers at no extra cost to you.