Commercial Mortgages: Rates, Lenders, DSCR and How to Get Approved in 2026

By Jake Stott, Knox Mortgages. Reviewed by an adviser authorised under Fort Advice Bureau, FCA FRN 972730. Published 25 September 2026. Last reviewed 25 September 2026.

A commercial mortgage is a long-term loan secured against a property that is used for business rather than as a home: a shop, office, warehouse, industrial unit, hotel, care home or a block of flats. Lenders typically advance 65% to 75% of the value, up to 80% for a trading business buying its own premises, over terms of 5 to 25 years, and price the loan as a margin over the Bank of England base rate.

This is the hub page for commercial finance at Knox Mortgages. It explains the two types of commercial mortgage, how lenders decide what you can borrow, what rates and fees look like in 2026, which lenders operate in each part of the market, why applications fail, and what the process involves from Manchester. Where you need a specialist product, it points you to the right page: owner-occupier commercial mortgages, semi-commercial mortgages, multi-unit freehold block mortgages, hotel finance and portfolio landlord mortgages.

What is a commercial mortgage and who uses one?

A commercial mortgage is finance secured on non-residential property, or on residential property held in a way that residential lenders will not touch, such as a large block of flats or a mixed portfolio. It is used by two groups: businesses that want to own the premises they trade from, and investors who want to buy commercial property and let it to a business tenant.

Three things separate it from a residential or buy-to-let mortgage. First, there is no rate sheet. Every loan is priced individually as a margin over base rate, set by the lender’s view of the property, the tenant or trading business, and you. Second, the assessment is built on the cash the property or business produces, not on your salary. Third, the process is slower and more manual: expect a Red Book valuation, a full set of accounts, a business plan or lease pack, and 8 to 16 weeks from application to completion. Commercial mortgages are not regulated by the FCA unless at least 40% of the property is used as the borrower’s home, so the consumer protections that apply to a residential mortgage do not apply here.

What is the difference between a commercial investment mortgage and an owner-occupier commercial mortgage?

An owner-occupier commercial mortgage funds a business buying the building it operates from; a commercial investment mortgage funds a landlord buying a commercial building to let to someone else. The property might be identical. The lender’s assessment, the achievable loan-to-value and the pricing are not, because the risk sits in different places: the trading performance of your business in one case, the strength of the lease and tenant in the other.

Factor	Owner-occupier commercial mortgage	Commercial investment mortgage
Who borrows	A trading business, often through a limited company or an OpCo/PropCo structure	An investor, individual, company, LLP or pension scheme (SIPP/SSAS)
What repays the loan	The business’s profits (EBITDA)	The rent from the commercial tenant
Assessment measure	Debt service cover ratio (DSCR), usually 1.25x or better	Rental cover, typically 125% to 130% of interest at a stress rate
Typical maximum LTV	70% to 75%; up to 80% with strong trading (Allica, Barclays, Cambridge and Counties); up to 100% for some healthcare professionals	65% to 75%; offices and secondary retail often capped at 60% to 65%
Typical term	10 to 25 years, capital and interest	5 to 25 years, interest-only widely available
Pricing in 2026	Lower: roughly base plus 2% to 3.5% at the high street	Higher: roughly base plus 2.5% to 5%
Main lenders	Lloyds, Barclays, NatWest, HSBC, Santander, Allica, Atom, Cambridge and Counties, Shawbrook	Shawbrook, Aldermore, Allica, InterBay, YBS Commercial, Redwood, Cambridge and Counties, Together
Knox page	Owner-occupier commercial mortgage	This page, plus portfolio landlord mortgages

The practical consequence is that a strong trading business can usually borrow more, at a lower rate, against its own premises than an investor could borrow against the same building let on a lease. High street banks such as HSBC and Santander lend only to owner-occupiers and restrict property investment to very large corporates, which is why most investment cases end up with challenger and specialist banks.

How do lenders assess a commercial mortgage application?

Lenders assess a commercial mortgage on whether the cash the property or business generates will comfortably cover the loan repayments, with the security value and your track record as the second and third tests. The measure they use depends on which type of mortgage you are applying for.

Owner-occupiers are assessed on debt service cover. The lender takes your adjusted EBITDA (earnings before interest, tax, depreciation and amortisation, with the rent you currently pay added back because you will stop paying it, and directors’ drawings and tax deducted) and divides it by the annual cost of the new mortgage. Most lenders want at least 1.25x, Allica publishes 130%, and a few require 1.4x or higher for weaker sectors. They will normally ask for two to three years of filed accounts, current management figures, and a business plan if the purchase changes the business.

Investors are assessed on rental cover, the commercial equivalent of the buy-to-let interest cover ratio. The lender takes the passing rent under the lease and requires it to cover the mortgage interest at a stress rate by a set margin, typically 125% to 130%. InterBay, for example, tests two-year products at the higher of 5% or the pay rate, and Redwood uses 130% for commercial investment. Lease length, break clauses, the tenant’s covenant strength and any rent-free periods all feed into the number.

On top of the cover test, every lender looks at the property (location, condition, EPC rating, alternative use value), the borrower (experience, credit history, net worth, personal guarantees) and the deposit source. Aldermore, for instance, excludes EPC F and G properties outright.

What does a DSCR calculation look like with real numbers?

Here is a worked example for an owner-occupier. A distribution business buys the £600,000 warehouse it has rented for six years. The lender agrees 75% LTV, so the loan is £450,000 over 20 years on capital and interest at 6.5%.

Step 1: the mortgage cost. £450,000 at 6.5% over 20 years costs £3,355 a month, or £40,260 a year.

Step 2: the cash available. The last filed accounts show EBITDA of £48,000. The business currently pays £30,000 a year in rent, which stops on completion, so the lender adds it back: £78,000. It then deducts £16,000 for corporation tax and the directors’ drawings it considers necessary, leaving adjusted cash of £62,000.

Step 3: the ratio. £62,000 divided by £40,260 gives a DSCR of 1.54x. The lender’s minimum is 1.25x, so the case passes.

Step 4: the stress test. Most lenders re-run the calculation at a higher rate. At 8.5% the same loan costs £3,905 a month, £46,860 a year, and the DSCR falls to 1.32x. Still above 1.25x, so the loan is affordable on the lender’s terms. Had the accounts shown EBITDA of £35,000 instead, adjusted cash would be £49,000 and the stressed DSCR 1.05x, a decline. That is the difference between a good year and a poor one in the filed accounts, and it is why timing an application after a strong year end matters.

The investment equivalent works the other way round: the lender starts from the rent and backs out the maximum loan. A unit let at £45,000 a year, tested at 125% cover and a 7.5% stress rate, supports interest of £36,000 a year, which caps the loan at £480,000 (£36,000 divided by 7.5%). If the building is worth £700,000, the 70% LTV limit would allow £490,000, but the rental cover limit wins and the loan is £480,000.

How much deposit do I need for a commercial mortgage?

You need a deposit of 25% to 35% for most commercial mortgages, which corresponds to a maximum loan-to-value of 65% to 75%. Owner-occupiers with strong trading accounts can reach 80% LTV with lenders such as Allica, Barclays and Cambridge and Counties, so a 20% deposit. Some professional practices, particularly dentists, pharmacists and GPs, can borrow up to 100% of the purchase price because lenders such as Atom Bank treat NHS contract income as near-guaranteed.

Scenario	Typical maximum LTV	Deposit needed	Notes
Owner-occupier, strong trading, standard property	75% to 80%	20% to 25%	Allica and Cambridge and Counties to 80%; NatWest and HSBC typically 75%; Lloyds 70%
Owner-occupier, under two years’ accounts	60% to 70%	30% to 40%	Cambridge and Counties considers 12 months’ accounts; most high street lenders want three years
Commercial investment, industrial or healthcare	75%	25%	Shawbrook 75% on industrial; YBS Commercial 75%
Commercial investment, retail	70% to 75%	25% to 30%	Shawbrook 70% interest-only, 75% with capital repayment
Commercial investment, offices	60% to 70%	30% to 40%	Aldermore caps offices at 60%
Semi-commercial (shop with flat above)	75%	25%	HTB and InterBay to 75%; see semi-commercial mortgages
Healthcare professionals buying a practice	85% to 100%	0% to 15%	Atom Bank: 95% dentists and pharmacists, 85% doctors, 100% including goodwill on low-risk practices
Additional security offered	Up to 100%	0%	Together will lend 100% where a second property secures the shortfall

Lenders base the LTV on the lower of purchase price and valuation, and on commercial investment property the valuer will often report a vacant possession value alongside the investment value. InterBay lends against the lowest of the three. If the vacant possession value is well below the price you are paying for a let building, your effective LTV drops and so does the loan. Deposit source matters too: gifted deposits are acceptable, but a deposit borrowed on a director’s loan or an unsecured facility is usually deducted from the affordability calculation.

What are commercial mortgage rates in 2026?

Commercial mortgage rates in September 2026 run from roughly 5.5% to 7.5% for owner-occupiers and 6% to 9% for commercial investment, with variable products priced at 2% to 5.5% over a Bank of England base rate of 3.75%. The Bank held base rate at 3.75% on 17 September 2026 for the third consecutive meeting, so the margin the lender charges over it is what drives your rate. There is no best-buy table: the same lender will quote different margins to two applicants on the same building.

Product	Indicative rate, September 2026	Source and date
Bank of England base rate	3.75%	Bank of England, held 17 September 2026
High street owner-occupier, strong covenant	Base plus 2% to 3.5%, so about 5.75% to 7.25%	2026 broker guides (FD Commercial, reviewed 3 July 2026; Construction Capital)
Owner-occupier fixed, all lenders	5.5% to 7.5%	FD Commercial, 3 July 2026
Commercial investment, all lenders	6% to 9%	FD Commercial, 3 July 2026
InterBay owner-occupier, 2 and 5 year fixed	6.59% to 8.24% (1% to 3% fee options)	InterBay product guide, July 2026
InterBay commercial investment	6.99% to 8.64%, reverting to base plus 4.75%	InterBay product guide, July 2026
InterBay semi-commercial	From 6.04%	InterBay product guide, July 2026
HTB semi-commercial, 65% LTV	From 6.24%	HTB announcement, 22 July 2026
Shawbrook commercial trading (owner-occupier)	From 7.39%, variable over Shawbrook base with 0.75% floor	Shawbrook guide dated 9 June 2026
YBS Commercial investment, 2 and 5 year fixed	Circa 6.54% to 6.64% with 2% fee	YBS Commercial, June 2026
Redwood Bank commercial	From about 6.34%; variable is Redwood base (3.75%) plus margin	Redwood Bank product guide, 2026
Aldermore commercial, variable	Base plus about 2.5% to 3%, banded by LTV	Aldermore, June 2026
Together commercial term	From 8.64%	Together, 2026

Fixed rates of two, three, five and up to ten years are available at most banks; NatWest and Barclays fix to 10 years, Atom to 7. Variable loans track either the Bank of England base rate or the lender’s own base rate, and several lenders apply a floor (Shawbrook 0.75%, HSBC 0%) so the rate cannot fall below a set level. Discounts exist for EPC A to C properties (Allica 0.25%), for larger loans, and for moving your business banking. Rates change after every Monetary Policy Committee decision; the figures above were correct at the date shown and are indicative, not offers.

What fees does a commercial mortgage carry?

A commercial mortgage typically costs 1% to 2% of the loan in arrangement fees, plus a valuation fee of £1,500 to £5,000 or more, legal fees for both you and the lender, and in many cases a broker fee, an admin fee and an exit or early repayment charge. On a £500,000 loan, budget £15,000 to £25,000 in total costs before stamp duty. Fees are the part of the deal that lenders vary most, so the lowest headline rate is rarely the cheapest loan.

Fee	Typical amount	When paid	Examples
Arrangement fee	1% to 2% of the loan; 3% to 5% on some fee-for-rate products	On completion, usually added to the loan	Allica 1.5% owner-occupier, 2% investment; Aldermore 2%; YBS 2%; Redwood 2% or 5%; InterBay 1%, 2% or 3%; NatWest none on standard products
Valuation fee	£1,500 to £5,000 plus, scaled to value and complexity	Upfront, at application	Cambridge and Counties charges no valuation fee until the case is approved
Lender’s legal fees	£1,500 to £5,000, sometimes dual representation	On completion	Some bridging and specialist lenders offer dual rep to cut cost
Your legal fees	£1,500 to £4,000 plus searches and SDLT	On completion	Commercial conveyancing is more involved than residential
Admin or application fee	£145 to £500	At application, non-refundable	InterBay £145
Early repayment charge	1% to 5% on fixed rates, declining; often none on variable	If you redeem inside the fixed period	NatWest none; Atom none on variable, 10% overpayments free on fixed; Redwood 10% overpayments free
Exit fee	0% to 1%	On redemption	Common on development and bridging, less so on term loans

Stamp duty land tax on commercial property is charged at 0% up to £150,000, 2% from £150,001 to £250,000 and 5% above £250,000, with no higher-rate surcharge and no first-time buyer relief. VAT may apply if the seller has opted to tax the building, in which case you either register and reclaim it or arrange a short VAT loan; Cambridge and Counties offers a VAT loan to 90% combined LTV for this purpose.

How long is a commercial mortgage term and how is it repaid?

Commercial mortgage terms run from 5 to 25 years, with 30 years available from a handful of lenders (Together, InterBay, Redwood, Allica on owner-occupier) and a 40-year outlier at the top of the market. Owner-occupier loans are usually capital and interest so the business owns the building outright at the end. Investment loans are frequently interest-only or part-amortising, because the investor plans to sell or refinance and wants to maximise cash flow in the meantime.

The choice affects both the rate and how much you can borrow. Shawbrook, for example, lends 70% on retail investment on interest-only but 75% where at least part of the loan is on capital repayment. YBS Commercial sets a minimum term of 5 years and caps loans over £2m at 10 years. Redwood caps interest-only commercial loans at a 20-year term. Several lenders offer capital repayment holidays of 6 to 24 months at the start (NatWest to 6 months, HSBC to 24) to let a business absorb relocation costs.

Two structural points worth knowing. A commitment period and an amortisation period are different things: Atom, for instance, commits for 2 to 10 years but amortises over 25, so you refinance or renew at the end of the commitment. And most lenders will want a personal guarantee from the directors on a company loan, often limited to a percentage of the debt (YBS asks for the greater of £175,000 or 10%).

Which lenders offer commercial mortgages in the UK?

The UK commercial mortgage market has three tiers: the high street banks (Lloyds, Barclays, NatWest, HSBC, Santander), which offer the cheapest money to established owner-occupiers with clean accounts; the challenger and specialist banks (Shawbrook, Aldermore, Allica, Cambridge and Counties, HTB, InterBay, YBS Commercial, Together, Atom, Redwood, Recognise, UTB), which take investment cases, shorter trading histories and unusual property; and the private and short-term lenders that bridge the gap when a term lender needs a stabilised asset first. Knox’s commercial bridging desk covers that third tier.

Lender	Segment	Owner-occupier	Investment	Max LTV	Loan size	Published criteria (2026)
Lloyds	High street	Yes	Limited	70%	Bespoke	Relationship-led; strong trading history expected
Barclays	High street	Yes	Limited	80%	£25,000 upward	Fixed to 10 years, terms 1 to 25 years, typically 3 years’ accounts
NatWest	High street	Yes	Not for landlords with 10+ properties	75%	£25,001 to £10m fixed, no cap variable	25% deposit typical, no set-up fees, no ERCs, to 25 years
HSBC	High street	Yes	No (unless £15m+ turnover)	75%	£25,000 to £25m	Owner-occupied trading premises only, fixed to 10 years, repayment holidays to 24 months
Santander	High street	Yes	No	Bespoke	£25,001 upward	Minimum turnover £250,000; may require rate hedging where cover is low
Allica Bank	Challenger	Yes	Yes	80% OO, 75% inv	£150,000 to £10m (£15m inv)	DSC 130%; 2 years’ accounts; 1.5% fee OO, 2% inv; offers issued in as little as 7 days
Shawbrook	Challenger	Yes	Yes	75%	£150,000 to £2.5m standard; £50m structured	Retail 70% IO or 75% C&I; healthcare and education 75%; industrial 75%; OO from 7.39%
Aldermore	Challenger	Yes	Yes	75% (offices 60%)	£500,000 to £3m; CRE desk to £100m	Base plus 2.5% to 3%; 2% fee; EPC F and G excluded; 2 to 20 years
Cambridge and Counties	Challenger	Yes	Yes	80%	£150,000 to £15m	Trading businesses with 12 months’ accounts considered; no valuation fee until approved; SIPP and SSAS specialist
InterBay (OSB)	Specialist	Yes	Yes	75%	£125,000 to £25m	England and Wales only; ICR 125% at higher of 5% or pay rate; OO 110% on market rent; £145 admin fee
YBS Commercial	Specialist	Yes (£500,000 to £5m)	Yes (£250,000 to £20m)	75%	£250,000 to £20m	ICR 125%; min term 5 years; min PG £175,000 or 10%; DIP in 24 hours, offer in 30 days
Hampshire Trust Bank	Specialist	No	Yes	75%	£100,000 to £35m	Semi-commercial from 6.24% at 65% LTV (July 2026); term 5 to 30 years
Redwood Bank	Specialist	Yes	Yes	71.4% commercial, 76.5% semi-commercial	£250,000 to £10m	Credit-tiered pricing accepts light adverse; DSCR 130% commercial; 2 to 30 years
Atom Bank	Specialist	Yes	Yes	75% (healthcare to 100%)	£100,000 to £10m	Cover 125% stressed at margin plus 6.5%; excludes nightclubs, fuel stations, gambling
Together	Specialist	Yes	Yes	75% (100% with extra security)	£50,000 to £5m	Commercial term from 8.64%; accepts expats, foreign nationals and adverse credit; 6 to 30 years
Recognise Bank, UTB	Specialist / bridging	Yes	Yes	75%	£50,000 to £35m	Primarily short-term commercial bridging with term refinance routes

Criteria above are taken from lender product guides and announcements between May and September 2026 and Knox’s own lender database; they change frequently and are shown to illustrate how the market segments, not as an offer. Note that several of these lenders (YBS Commercial, Aldermore, Atom) only accept applications through brokers who are NACFB or FIBA members, and Aldermore’s broker panel was closed to new members in mid-2026. Knox holds NACFB membership, which is what gets a case onto those desks.

Which property types are hard to finance with a commercial mortgage?

The hardest properties to finance are those with a narrow pool of alternative users, a poor EPC, contamination risk, or a value that depends on a single operator: petrol stations, nightclubs, standalone restaurants, secondary retail parades with short leases, vacant offices, land without planning, and anything with a lease under five years or a tenant in a weak sector. Lenders can still be found for most of them, but at lower LTVs, higher margins and with a smaller panel.

Property type	Lender appetite	Typical maximum LTV	Why
Industrial and warehousing	Strong	75%	Deep occupier demand, simple buildings, easy to re-let
Healthcare (GP, dental, pharmacy, vet)	Strong	75% to 100%	NHS-backed income, long leases
Semi-commercial (shop with flats)	Strong	75%	Residential element gives fallback value
Hotels and guest houses	Moderate, specialist	65% to 70%	Trading risk; valued on EBITDA. See hotel finance
Care homes	Moderate, specialist	65% to 75%	CQC rating and occupancy drive value
Prime retail with national tenant	Moderate	70% to 75%	Depends entirely on lease length and covenant
Offices	Cautious	60% to 70%	Post-2020 demand shift; Aldermore caps at 60%
Secondary retail, short lease	Cautious	55% to 65%	Re-letting risk, falling rents
Pubs, restaurants, nightclubs	Limited	50% to 65%	Operator-dependent; Atom excludes nightclubs
Petrol stations, gambling, mining	Very limited	50% or excluded	Environmental and regulatory risk
Vacant commercial property	Term lenders decline	n/a	Use a bridge until let, then refinance
Land without planning	Term lenders decline	n/a	Bridging or development finance only

Vacant buildings are the most common mismatch we see. A term lender assesses on rent or trading; with neither, there is nothing to assess. The route is a commercial bridging loan to buy and let the building, then a term mortgage once a lease is signed. The same applies to properties being converted: development finance or a refurbishment bridge first, term finance on completion. Our bridging loan calculator shows what the short-term stage costs.

What is the commercial mortgage application process and how long does it take?

A commercial mortgage takes 8 to 16 weeks from application to completion, with 6 to 10 weeks the norm for a clean owner-occupier purchase at a challenger bank and 12 to 16 weeks at a high street bank or on a complex investment case. Indicative terms come much faster: 24 to 48 hours from most lenders once the broker has packaged the case, and YBS Commercial issues a credit-backed decision in principle within 24 hours.

Stage	What happens	Typical time
1. Fact find and packaging	Broker gathers accounts, management figures, lease or business plan, asset and liability statement, ID; identifies the right lenders	3 to 7 days
2. Indicative terms	Two or three lenders quote rate, fee, LTV and conditions	1 to 3 days each
3. Full application and credit approval	Underwriter reviews the case; credit committee for larger loans	2 to 4 weeks
4. Valuation	RICS Red Book valuation instructed and reported; may include MV1, MV2 and MV3 bases	2 to 3 weeks
5. Formal offer	Facility letter issued with conditions precedent	1 week after valuation
6. Legal work	Title, searches, lease review, environmental report, guarantees, independent legal advice for guarantors	3 to 6 weeks
7. Completion and drawdown	Conditions satisfied, funds released	Total: 8 to 16 weeks

The lender will ask for: two to three years of filed accounts (Cambridge and Counties will look at 12 months), the last 3 to 6 months of business bank statements, up-to-date management accounts, a business plan or cash flow forecast where the purchase changes the business, the lease and tenant information on an investment, an asset and liability statement for each director or guarantor, proof of deposit, and ID. Delays almost always come from one of three places: accounts not yet filed, a valuation that comes in below the price, or a lease with a problem the buyer did not know about. Packaging properly at stage 1 removes most of them.

Why do commercial mortgage applications get declined, and what is the fix?

Commercial mortgage applications are declined for six recurring reasons: the debt service cover is too thin, the accounts are too young or show a loss, the property is a type or condition the lender does not want, the lease is too short, the deposit is borrowed, or the credit file has adverse entries. Almost every one has a fix, and the fix usually means a different lender or a different structure rather than giving up.

Reason for decline	What the lender saw	The fix
DSCR below minimum	Adjusted EBITDA covers the loan at less than 1.25x, or fails the stress test	Reduce the loan with a bigger deposit, extend the term to cut the annual cost, or apply after a stronger year end; consider a lender that uses 110% on market rent for owner-occupiers (InterBay)
Trading history too short	Fewer than 2 or 3 years of filed accounts	Cambridge and Counties considers 12 months; specialist lenders will lend on projections with a larger deposit; a bridge-to-term can buy time
A loss-making year	One bad year in the last three	Explain it with management accounts showing recovery; challengers underwrite manually and will read the story, high street credit scoring will not
Property type or condition	Offices, secondary retail, EPC F or G, contamination flag	Move to a lender with appetite (Together, Redwood, InterBay); commission an EPC upgrade plan; obtain an environmental report before application
Lease too short or weak tenant	Under 5 years unexpired, break clause inside the loan term, tenant with poor covenant	Negotiate a lease extension or renewal with the tenant before completion; lend on vacant possession value with a lower LTV; bridge until re-let
Borrowed deposit	Deposit from a director’s loan or unsecured facility	Some lenders accept it if the repayments are in the DSCR; otherwise a second charge on another property (Together) or a joint venture partner
Adverse credit	Defaults, CCJs, missed payments on the directors or the company	Redwood’s tiered pricing and Together’s manual underwriting accept light adverse; older or satisfied entries matter less
Valuation below price	Red Book value or vacant possession value under the agreed price	Renegotiate the price, increase the deposit, or challenge the valuation with comparable evidence

A decline at one bank is not a market verdict. The most common pattern we see is a business declined by its own bank on credit score, then approved by a challenger that read the accounts. The cost of getting it wrong is the valuation fee and six weeks, which is why we assess a case against live lender criteria before anyone pays for a valuation.

Commercial mortgage broker in Manchester and Stockport

Knox Mortgages is a commercial mortgage broker based in Stockport, serving businesses and investors across Greater Manchester: the city centre office market, the industrial estates at Trafford Park, Sharston, Bredbury and Heywood, the retail and leisure stock in the Northern Quarter, Didsbury, Altrincham and Stockport town centre, and the semi-commercial parades that line every arterial road out of the city. Our commercial desk is a member of the NACFB, the trade body most challenger banks require for panel access, and we work directly with lender BDMs rather than through a packager.

Two things about Manchester matter for commercial lending. The first is valuation: lenders’ panel valuers know the Greater Manchester industrial market well, so a unit in Trafford Park or on the M60 corridor gets a confident valuation and a full-LTV loan. Secondary retail in outer towns is the opposite, with valuers applying wide discounts for re-letting risk, so we place those cases with lenders who will lend on the building’s alternative use. The second is the pipeline of owner-occupiers priced out of leasing: rising industrial rents across Greater Manchester mean many trading businesses now find a mortgage payment on their own unit costs less than the rent, and the DSCR arithmetic above often works in their favour because the rent they already pay is added back.

We arrange commercial mortgages for clients across the whole of the UK, but if you are looking for a commercial mortgage broker in Manchester who will come and see the building, we are 20 minutes from the city centre. Our Manchester mortgage broker page covers the residential side.

An anonymised Knox commercial mortgage case

Illustrative and anonymised. A precision engineering business in Stockport had rented its 9,000 square foot unit for eleven years at £42,000 a year. The landlord offered to sell at £820,000. The company’s bank, where it had held its accounts for a decade, declined an 80% loan on credit scoring because the 2024 accounts showed a small loss during a machinery investment year, even though 2025 had returned EBITDA of £118,000.

We packaged the case for two challenger banks with the three years of accounts, current management figures showing EBITDA running at £130,000, and a note explaining the 2024 loss against the capital spend. Both quoted. The stronger offer was 75% LTV, £615,000 over 20 years on capital and interest at base plus 2.85% (6.6% at the time), with a 1.5% arrangement fee. Adjusted cash after tax and drawings was £112,000 including the £42,000 rent add-back; the annual mortgage cost was £55,460, a DSCR of 2.02x, and 1.74x at the lender’s stress rate. The offer was issued 19 days after full application, and completion took 11 weeks in total because the landlord’s title needed a deed of variation.

The business now pays £4,622 a month to own the building rather than £3,500 to rent it, and holds a freehold asset in a pension-eligible structure. The point of the example is not the outcome; it is that the decline was a scoring artefact, not a judgement on the business, and the fix was a lender who reads accounts.

Which type of commercial finance do you need?

Commercial mortgages are a family of products, and the right page depends on the property and your position. The table below routes you to the Knox page for each situation.

Your situation	Product	Knox page
A trading business buying its own premises	Owner-occupier commercial mortgage	Owner-occupier commercial mortgage
A shop, office or unit with flats above	Semi-commercial mortgage	Semi-commercial mortgage
A block of flats on one freehold title	Multi-unit freehold block mortgage	Multi-unit freehold block mortgage
A hotel, guest house or B&B	Hotel finance	Hotel finance
Four or more let properties, refinancing together	Portfolio landlord mortgage	Portfolio landlord mortgage
A house let room by room	HMO mortgage	HMO mortgage
A vacant or unlettable commercial building	Commercial bridging loan, then term	Commercial bridging loan
Building or converting commercial property	Development finance	Property development finance

Commercial mortgage frequently asked questions

How difficult is it to get a commercial mortgage?

Harder than a residential mortgage, but not difficult if the numbers work. A trading business with two years of profitable accounts and a 25% deposit will get terms from several lenders within days. It becomes difficult when the debt service cover is under 1.25x, the accounts are under two years old, or the property is a type lenders avoid, and in those cases the answer is a specialist lender or a different structure, not a refusal.

How much deposit do I need for a commercial mortgage?

25% to 35% for most applicants. Owner-occupiers with strong trading can get to 80% LTV, so a 20% deposit, with lenders such as Allica, Barclays and Cambridge and Counties. Investment purchases usually need 25% to 30%, and offices or secondary retail 30% to 40%. Healthcare professionals can borrow up to 100% with Atom Bank.

Is it possible to get a 100% commercial mortgage?

Yes, in two situations. Dentists, pharmacists and GPs can borrow up to 100% of a practice purchase including goodwill from lenders such as Atom Bank. Any borrower can reach 100% by offering additional security, typically a charge over another property, which Together and others accept. Without either, 80% is the ceiling.

What is a good DSCR for a commercial mortgage?

1.25x is the minimum at most lenders, 1.3x at Allica and Redwood, and 1.4x or higher for weaker sectors. Anything above 1.5x after the stress test is comfortable and will attract the best pricing. Some lenders offer a rate discount where cover exceeds 2x.

Can I get a commercial mortgage with bad credit?

Yes, with specialist lenders. Redwood Bank prices in three credit tiers and accepts light adverse, and Together underwrites manually and considers defaults and CCJs. Expect a lower maximum LTV, usually 60% to 65%, and a higher margin. Recent bankruptcy or an active IVA narrows the market to a handful of lenders.

Can I buy commercial property through my pension?

Yes. A SIPP or SSAS can buy commercial property, and lenders including Cambridge and Counties and InterBay will lend to the pension scheme, normally up to 50% of the scheme’s net assets under HMRC rules. The business then pays rent to the pension, which is tax-deductible for the company and tax-free inside the scheme. Take regulated pension advice before structuring it this way.

How long does a commercial mortgage take?

8 to 16 weeks from full application to completion. Indicative terms come within 24 to 48 hours, formal offers in 3 to 5 weeks, and the balance is valuation and legal work. Challenger banks are usually faster than the high street: Allica has issued offers within 7 days of application, and YBS Commercial targets 30 days.

Do I need a broker for a commercial mortgage?

Not legally, but practically yes for anything beyond a clean owner-occupier case at your own bank. Several of the most competitive lenders (YBS Commercial, Aldermore, Atom) only accept applications through NACFB or FIBA member brokers, pricing is negotiated rather than published, and a broker packages the case so it is credit-approved first time. Most commercial lenders pay the broker, so the cost to you is often nothing.

Speak to a commercial mortgage broker

Knox Mortgages is a whole-of-market broker with a dedicated bridging and commercial desk, NACFB membership and direct relationships with the high street, challenger and specialist lenders listed on this page. We assess your case against live lender criteria before you pay for a valuation, tell you which lenders will and will not take it, and package it so it is approved first time. Book a discovery call and bring your last two years of accounts.

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Your home may be repossessed if you don’t keep up repayments on your mortgage.

Knox Mortgages is a trading style of Fort Advice Bureau which is regulated and authorised by the FCA to conduct Mortgage and Protection business, FRN: 972730