What Are Commercial Mortgage Rates in the UK Right Now?

You can ask three people for commercial mortgage rates UK 2026 and get three different answers, because the rate is only half the story. The real price sits in the LTV band, the stress test, the valuation outcome, and the fees.

As of 5 March 2026, most UK commercial mortgage rates right now still land broadly in the 6% – 14% per annum range, depending on risk and structure.

Below, I’ll break down fixed and variable pricing, what pushes rates up or down, and how to compare lenders and brokers using a mortgage calculator so you can target the best commercial mortgage rates UK for your deal.

Key Takeaways

• Commercial mortgage pricing usually starts with an underlying benchmark and a risk margin. In the Bank of England’s February 2026 decision, Bank Rate was held at 3.75%, which matters most if you are considering variable rate products.
• Real lender examples (useful as benchmarks) show why you need to compare like-for-like. InterBay’s product guide dated January 2026 shows 2-year and 5-year fixed starting rates that move with LTV, EPC band, and whether you choose a 1%, 2%, or 4% arrangement fee.
• Allica Bank’s commercial mortgage product guide published in February 2025 lists 5-year fixed rates across commercial investment, semi-commercial, and owner-occupied, plus discounts such as 0.25% for EPC A to C and 0.25% for loans of £750,000 or more.
• Typical costs still include more than the headline interest rate: arrangement fees often run 1%–5% depending on product choice, plus valuation and legal costs. Example fee scales published by Allica include valuations of £845–£1,545 (higher above £1m) and legal fees from about £900 to £2,200.
• Lenders and brokers (for example Aldermore, Shawbrook, Together, Allica, Commercial Trust, and Revolution Brokers) price off loan to value, credit history, property type, and affordability ratios such as debt service cover (often 125%–130% in product guides).

Current Commercial Mortgage Rates in the UK: commercial mortgage rates UK 2026

Current commercial mortgage rates UK are driven by two moving parts: what it costs a lender to fund the loan, and how risky your deal looks on paper.

Your job is to make the deal easy to underwrite. That means a sensible loan to value ratio, clean documentation, and a property the valuer can support.

What are the average fixed-rate commercial mortgage rates?

Fixed rates help you plan. You lock your repayments for a set period, usually 2, 3, 5, or sometimes 7 years, then the loan reverts to a lender’s variable pricing.

Here are example 5-year fixed rates shown in Allica Bank’s commercial mortgage product guide (published February 2025). Treat these as reference points, not a promise of what you will be offered.

In practice, you can often improve a fixed quote by pulling the right levers. Common examples include a stronger EPC band, a larger deposit (lower LTV), and better affordability cover.

• Check discount triggers early: some lenders advertise small rate reductions (for example 0.25%) for EPC A to C, larger loans, or stronger debt service cover.
• Ask about rate validity: some product guides state fixed rates are held for a limited window from offer, which matters if your purchase has a long lead time.

What are the average variable-rate commercial mortgage rates?

Most variable deals work like this: pay rate = benchmark + margin. The benchmark is often Bank Rate, but some lenders use their own reference rate for commercial lending.

With Bank Rate at 3.75% (as of February 2026), a margin of 2.90% would imply a starting pay rate of 6.65%, before any lender-specific floors or resets.

If you choose variable rates, decide in advance what you will do if the benchmark moves. That could mean building a buffer into cash flow, or planning a refinance into a fixed rate when pricing improves.

Factors Affecting Commercial Mortgage Rates

Lenders set mortgage rates for a commercial mortgage by combining property risk, borrower risk, and cash flow strength.

One important detail people miss is regulation. Many commercial mortgages are not FCA-regulated, but mixed-use cases can fall under regulation if enough of the security is used as a dwelling (the FCA perimeter guidance uses a 40% test in its definition of a regulated mortgage contract).

How does the loan-to-value ratio (LTV) impact rates?

Lower LTVs usually buy better rates because you are giving the lender more equity cushion.

Think of LTV as your quickest lever. If you can move from 75% to 65% LTV, you often unlock a cheaper pricing tier and a wider set of mortgage lenders.

There are exceptions. Metro Bank announced a commercial mortgage option at 85% LTV for loans up to £5 million in June 2025, but you should expect tighter underwriting and fewer acceptable property types at that end of the market.

• Use a simple deposit check: on a £500,000 purchase, a £100,000 deposit is 80% LTV borrowing.
• Use refinancing strategically: if your valuation rises or you pay down capital, you can refinance to a lower LTV band and target the lowest commercial mortgage rates UK available for your profile.
• Watch property-specific caps: lender criteria can tighten for certain sectors. For example, specialist lenders have announced LTV changes by property type, including offices.

Why is business credit history important for mortgage rates?

Your credit history shapes both your pricing and your lender choice. If you have late payments, arrears, or recent adverse events, you may still get funding, but you can expect fewer options and higher pricing in the commercial mortgage rates with bad credit UK bracket.

To give you the lender’s perspective, the Insolvency Service reported 25,158 corporate insolvencies in 2023, which keeps underwriters cautious about cash flow and stress testing.

• Pull your business and personal files early: Lenders often look at both, especially where a personal guarantee is likely.
• Make your records consistent: Align bank statements, filed accounts, and Companies House details so the underwriter does not have to guess.
• Explain blips in writing: One clear paragraph on what happened and what changed can do more than vague reassurance.

If you want a faster route to the right lender, a broker such as Revolution Brokers can package the case, set expectations, and push you away from lenders that will decline late in the process.

How does the type of property affect commercial mortgage rates?

Property type affects both rate and leverage. A standard office or industrial unit is usually easier to value and easier to sell, which helps pricing. Specialist assets (hotels, care homes, day nurseries, petrol stations) can still be financeable, but lenders often apply tighter terms and higher stress rates.

Energy performance now plays a direct role. The government’s guidance on non-domestic MEES says landlords must not continue letting a non-domestic property below EPC band E from 1 April 2023 unless a valid exemption is registered, and that risk can flow into valuation, tenant demand, and lender appetite.

If your building is mixed-use, get clear on the split. Lenders commonly test the residential share (by floor space or by value) to decide whether it qualifies as semi-commercial pricing, and that decision can move your rate by more than any small negotiation on margin.

What role does loan term length play in rates?

Term length changes your monthly payment and your total cost of capital. Most commercial mortgages run up to 25 years, but the deal rate is commonly fixed for only 2 to 7 years.

What matters is affordability testing. For example, MT Finance’s commercial mortgage product guide dated January 2026 shows that 2-year fixed affordability can be tested at the greater of pay rate plus 2% or a benchmark-based stressed rate, while 5-year fixed affordability may be tested closer to the pay rate.

• Shorter term: Higher monthly payments, lower total interest, quicker equity build.
• Longer term: Lower monthly payments, higher total interest, easier cash flow for trading businesses.
• Exit planning: If you expect a sale or a refinance, match the fixed period to your likely timeline so you do not pay avoidable early repayment charges.

Types of Commercial Mortgages

Most commercial mortgages fall into four buckets: investment, owner-occupied, semi-commercial, and bridging loans. Each one carries its own underwriting logic, and that is why two deals with the same property value can price very differently.

What are commercial investment mortgages?

Commercial investment mortgages fund property you let to tenants. Underwriters focus on rent, lease quality, and property resale, then apply an affordability ratio such as interest cover.

In Allica Bank’s product guide published February 2025, commercial investment pricing is shown with 5-year fixed rates across 60% to 70% LTV, and variable options priced as margins over the benchmark.

• Practical tip: Take a rent schedule and copies of key leases to the broker call. It speeds up both valuation instruction and underwriting.
• Watch the reversion: If you are taking a 5-year fixed rate, model the reversion rate as a worst-case so you are not forced into a rushed refinance.

What are owner-occupied commercial mortgages?

Owner-occupied commercial mortgages fund property your business trades from. Lenders tend to look at business financials, bank statements, and debt service cover based on EBITDA rather than rent.

Some products build in flexibility. For example, Allica Bank’s owner-occupied criteria in its February 2025 product guide includes an option for up to a two-year capital repayment holiday on certain structures, and it lists an additional 0.25% discount where 200% debt service cover can be evidenced.

What are semi-commercial mortgages?

Semi-commercial mortgages cover mixed-use buildings, such as a shop with flats above. They can price well, but the lender will test whether the building really counts as mixed-use in a way that is saleable.

Eligibility rules vary. One lender may look for 50%–80% residential by floor space, while another may test residential value. Your valuer’s apportionment can decide the product, so ask your broker what evidence the lender will accept before you pay valuation fees.

What are commercial bridging loans?

Bridging loan products are short-term, asset-backed funding. They are built for speed and complexity, not for being cheap.

Always translate the price into real money. In Allica Bank’s February 2025 product guide, residential bridging examples are priced monthly (for example 0.71% to 0.99% depending on LTV and exit), which is a very different cost profile from an annualised commercial mortgage.

• Get the exit in writing: Sale, refinance, or capital injection, with dates.
• Budget for fees: Arrangement fees, valuation, legal, and sometimes monitoring or extension costs.

How to Compare Commercial Mortgage Rates

To compare commercial mortgage lenders properly, you need a like-for-like view: rate, fees, structure, and the lender’s stress test. That is the only way to identify the best commercial mortgage rates UK for your real-world cost, not just the headline.

Use a mortgage calculator to run scenarios, but make sure you include fees and likely reversion pricing.

Should I choose fixed or variable rates?

Fixed deals suit you if you want predictable payments and you can see a clear horizon for your next refinance. Variable deals suit you if you can absorb rate changes and you want flexibility.

Timing matters. The next Bank of England rate decision is scheduled for 19 March 2026, so if you are weighing a variable deal, you should model both a flat-rate and a moving-rate scenario.

• Fixed: Payment stability, but early exits can trigger ERCs and, in some cases, break costs.
• Variable: Flexibility, but your payments can rise quickly if the benchmark moves.
• Simple discipline: Before you sign, ask for the lender’s reversion pricing and build it into your downside plan.

What fees and additional costs should I consider?

Fees are where two deals that look similar can separate fast. You should compare the total cost over your expected hold period, not just the initial rate.

• Arrangement fee: Often 1%–5% depending on product. Some lenders let you choose a higher fee for a lower rate, so you must model both.
• Valuation fee: Depends on property value and complexity, and is often payable upfront.
• Legal fees: Vary by loan size and complexity, and can rise for specialist security or title issues.
• Broker fee: Commonly 0%–2%, but it can be a fixed figure on smaller cases.
• Early repayment charges: Check the year-by-year scale and any overpayment allowance (10% per year is common in product literature, but never assume it).

If you want a quick sense-check, here is how fee choices can change the maths. InterBay’s January 2026 product guide shows commercial products with 1%, 2%, or 4% arrangement fee options, and the starting rate shifts with that choice.

How do loan terms and flexibility affect my mortgage?

Flexibility shows up in the clauses, not the headline rate. Overpayments, repayment holidays, interest-only periods, and extension options all change your real risk.

• Repayment type: Capital repayment, interest-only, or a split, and the lender may limit interest-only by term or exit plan.
• Overpayments: Check the annual allowance and what triggers a charge.
• Offer timing: If your purchase is slow, ask how long the lender will hold the fixed rate before repricing.

Tips to Secure the Best Rates

You win better pricing by making the deal easy to approve. That means clean credit, sensible leverage, and a clear story on property use and exit.

How can I improve my credit score for better rates?

Start with evidence, not optimism. Pull your reports, fix errors, and prepare a short written explanation for anything that looks negative.

• Stabilise cash flow: Reduce overdraft usage and avoid bouncing payments in the months before applying.
• File on time: Late filings and messy accounts slow underwriting and can affect pricing.
• Be consistent: Keep company names, addresses, and director details aligned across documents.

Why reduce your loan-to-value ratio?

Reducing LTV lowers lender risk, which often lowers your rate and improves acceptance odds. It can also reduce how often a lender leans on personal guarantees.

If you are close to a pricing tier, even a small capital injection can matter. That is why many borrowers time refinancing after a revaluation or after paying down debt.

How can working with a broker help secure good rates?

A good broker does three things: finds the lender that fits your property type, packages the case to reduce back-and-forth, and negotiates around fees and structure.

That is where firms like Revolution Brokers and Commercial Trust can add value, especially for semi-commercial properties, specialist assets, and cases with imperfect credit.

Costs Involved in a Commercial Mortgage

The headline rate is visible. The real cost is the rate plus fees, plus the cost of constraints like ERCs, valuation conditions, and stress testing.

Ask for a full fee schedule early, then build it into your mortgage calculator model before you commit.

What are arrangement fees?

Arrangement fees are the lender’s setup cost. In commercial lending they are often priced as a percentage of the loan, and you will see common bands such as 1%, 2%, 2.5%, 4%, or 5% depending on the product.

Some lenders allow the fee to be added to the loan balance (subject to LTV limits). That can help cash flow on day one, but you pay interest on the fee too.

What are valuation fees?

Valuation fees pay for the lender’s survey and risk assessment. Many lenders use RICS-qualified surveyors, and the final fee depends on property size, complexity, and how specialist the asset is.

Some products also specify the valuation basis. For example, MT Finance’s January 2026 product guide references valuation on a 180-day open market value basis, which can be more conservative than headline market value.

Example valuation fee scales published by Allica start at £845 for properties up to £300,000 and reach £1,545 for values up to £1 million, with higher values typically quoted on request.

What are legal and broker fees?

Legal fees cover title checks, searches, and the facility documentation. Some lenders offer dual representation (one firm acts for both lender and borrower), while other cases need separate solicitors.

Allica publishes example lender legal fees ranging from about £900 on smaller loans up to about £2,200 on larger loans, with higher values quoted on request.

Broker fees commonly sit between 0% and 2% of the loan, though some brokers charge a fixed fee. Always confirm whether the broker is also being paid a procuration fee by the lender, and make sure you understand what service you are paying for.

Conclusion

Commercial mortgage rates UK 2026 still tend to sit in a wide band, often around 6%–14% per year, because lenders price off risk, structure, and fees, not just the base rate.

Use a mortgage calculator to model fixed, variable, and reversion scenarios before you apply.

Compare lenders such as Aldermore, Shawbrook and Together, and consider specialist banks where your property type needs it.

If you want speed and clarity, work with a broker like Commercial Trust or Revolution Brokers to compare the total cost and avoid expensive surprises.

FAQs

1. What are commercial mortgage rates in the UK right now?

They vary by lender, loan-to-value, property type and term, and change often. Check current rates with a broker or lender site and watch the Bank of England base rate.

2. Why do rates differ so much between lenders?

Lenders set rates on risk, their funding costs and the sector involved. A specialist lender may charge more for higher risk projects, while a high street bank may offer lower rates on low LTV deals.

3. How can I get the best commercial mortgage rate?

Compare quotes from several lenders and use a specialist broker, cut the loan-to-value if you can, and choose a suitable term and fixed or variable deal. Also compare fees and early repayment charges to see the true cost.

4. Should I pick a fixed rate or a variable rate now?

Fixed rates give certainty and help budgeting, variable rates can be cheaper if base rates fall. Your choice should match your cash flow and risk appetite, and a broker can help model outcomes.