Countless businesses, business owners and aspiring business owners contact us with questions about <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/">commercial mortgage<\/a> interest rates, so we\u2019ve put together this comprehensive guide to business mortgage rates in the UK.\n\nThe following topics are covered below\u2026\n<ul>\n \t<li><a href="#mortgage-rates">What are the current commercial mortgage rates?<\/a><\/li>\n \t<li><a href="#more-expensive">Are commercial mortgages more expensive?<\/a><\/li>\n \t<li><a href="#determined">How are commercial mortgage rates determined?<\/a><\/li>\n \t<li><a href="#best">How do I get the best commercial mortgage rates?<\/a><\/li>\n \t<li><a href="#rates-terms">Commercial mortgage rates and terms<\/a><\/li>\n \t<li><a href="#comparison">How do I carry out a comparison of commercial mortgage rates?<\/a><\/li>\n \t<li><a href="#small-busi">Are commercial mortgage loan rates any different for small businesses?<\/a><\/li>\n \t<li><a href="#same-across">Are business mortgage interest rates the same across the UK?<\/a><\/li>\n \t<li><a href="#speak-to">Speak to a commercial mortgage rates expert<\/a><\/li>\n<\/ul>\n[feefo-banner]\n<h2 id="mortgage-rates">What are the current commercial mortgage interest rates in the UK?<\/h2>\nThere\u2019s no simple answer to this question. You won\u2019t find many definite rates listed on lenders\u2019 websites because commercial mortgage loan rates are not predetermined.\n\nThis may be true of residential mortgages, but commercial applications are always handled on a case-by-case basis and the rates you end up with will be determined based on a thorough assessment of you and\/or your business, and the strength of the investment.\n\nLenders tend to offer their best commercial mortgage deals when the perceived level of risk is low, and what is classed as risky will vary across the board.\n<h3>How is interest charged on a commercial mortgage?<\/h3>\nLike residential mortgages, commercial mortgages can be either fixed or variable rate - although variable rate is more common with this type of borrowing.\n\nWith fixed-rate lending, you will pay a discounted rate of interest for a set period of time (usually between 2 and 10 years) before switching to the lender\u2019s standard variable rate (unless you refinance), which will likely be higher.\n\nMeanwhile, interest rates on variable rate commercial mortgages are based on either the Bank of England\u2019s Base Rate or LIBOR (London Inter-Bank Offered Rate).\n<h2 id="more-expensive">Are commercial mortgages more expensive than residential?<\/h2>\nThey can come with higher rates and fees because commercial mortgages are usually treated as higher risk than residential.\n<h3>What is the average interest rate on a commercial mortgage?<\/h3>\nAt the time of writing, your average owner-occupier commercial mortgage can come with an interest rate of anywhere between 2.75% and 7%. This may vary considerably based on the factors we'll go on to discuss in this article.\n\nCommercial investment mortgages are usually considered higher risk and, at the time of writing, come with typical interest rates of between 3.5% and 6%.\n<h2 id="determined">How are commercial mortgage loan interest rates determined?<\/h2>\nMost business lenders will take the following into account when determining interest rates for a commercial mortgage\u2026\n<ul>\n \t<li>Whether it\u2019s a commercial investment mortgage or an owner-occupier deal<\/li>\n \t<li>The loan to value ratio (LTV)<\/li>\n \t<li><a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/bad-credit-commercial-mortgage\/">Credit history<\/a><\/li>\n \t<li>You and\/or your business\u2019s financials<\/li>\n \t<li>The viability of the investment<\/li>\n \t<li>The size of the loan<\/li>\n<\/ul>\nWe outline how each of the above can impact interest rates for commercial mortgage loans in the section below, but you can always make an enquiry to speak with an expert <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/commercial-mortgage-broker\/">commercial mortgage broker<\/a> on the phone for more information and access to the best lenders in the business.\n<h2 id="best">How do I get the best commercial mortgage loan rates?<\/h2>\nWhen customers ask us <i>\u201cwhat are the <\/i><i>rates for commercial mortgage loans<\/i><i>?\u201d<\/i> we find that it\u2019s more productive to tell them <i>how <\/i>to get the best rates, rather than cite average\/typical commercial mortgage rates to them. Interest rates are always in flux and can change at any time, not to mention the fact that business lending is usually bespoke.\n\nThe most important thing to keep in mind when it comes to getting the best commercial mortgage rates in the UK is that finding a broker with access to the entire market is the place to start. That way, all of the best deals you qualify for will be within reach.\n\nThe specialist advisors we work with are whole-of-market and have the expertise to offer insight on your application, and connect you to the provider best positioned to offer a low-interest commercial mortgage to a lender with your needs and circumstances.\n<h3>What criteria do I need to meet to qualify for the best business mortgage rates?<\/h3>\nEvery commercial lender will have different eligibility criteria, but generally speaking, most providers consider the following when deciding which business mortgage rate to offer\u2026\n<h4>The type of commercial mortgage you\u2019re applying for<\/h4>\nCommercial mortgages can be broadly divided into two types: commercial investment (for properties you\u2019re planning to let out) and owner-occupier (when you\u2019re buying business premises) - and the rates you end up with can differ based on the type you want.\n\nMost lenders consider commercial investment mortgages to be riskier, and therefore the rates they come with are usually higher than for owner-occupier deals.\n<h4>The loan to value ratio (LTV)<\/h4>\nCommercial mortgages typically come with higher <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/commercial-mortgage-deposit\/">deposit requirements<\/a> than residential, usually ranging between 25% and 40%. However, if you have the means to put down more, you might end up with more favourable rates, as most lenders prefer lower LTV deals.\n\nThat said, it may still be possible to get the best business mortgage rates in the UK without putting down extra deposit, as there are workaround solutions, such as securing the loan against a property or properties you already own and hold sufficient equity in.\n<h4>Your credit history<\/h4>\nSome lenders will refuse to offer their best business property mortgage rates if either you or your company have bad credit history. Specialist commercial providers, however, may take a more flexible approach to your application and consider the age and severity of the credit problems, as well as how closely you meet their other eligibility requirements.\n\nThrough a whole-of-market broker, it may be possible to find a lender specialising in\u2026\n\nThere may even be workaround solutions available if any of the above have prevented you from getting a commercial mortgage in the past. For example, certain lenders might be happy to overlook the risk if you put down extra deposit or additional security, or if you can evidence that the credit problems are historic or due to an unavoidable event.\n<h4>You\/your business\u2019s financials<\/h4>\nCommercial lenders will need to know that the mortgage is affordable and serviceable - the more confident they are of that, the more likely they are to offer favourable rates.\n\nFor owner-occupier deals, the provider will calculate how much you can afford to borrow by assessing your company\u2019s operating performance, and this will boil down to its earnings before interest, tax, depreciation and amortisation (EBITDA).\n\nThere\u2019s no hard and fast rule about how much you can borrow based on your business\u2019s EBITDA, but the figures will need to show it is profitable enough to cover the mortgage. Obviously, the more profitable your firm is, the more likely you are to get the best rates.\n\nRates for commercial investment deals, meanwhile, are usually based on the projected rental coverage. The more rent your investment property is likely to generate, the lower the risk. Some lenders will want the rental coverage to reach 190% for commercial properties and 130% for buy to let, but a specialist provider might be happy with 110-125%.\n<h4>The viability of the investment<\/h4>\nSome commercial lenders will only be happy to offer a commercial mortgage if they\u2019re confident you\u2019re making a sound investment - so expect a number of them to request a business plan beforehand, and the rates you end up with may be based on its strength.\n\nHaving experience in the relevant business sector might help convince some lenders that your plans are viable, especially if it\u2019s a high-risk field such as retail, although there are specialist providers who might offer favourable rates to first-time investors.\n\nGenerally speaking, though, a lack of trading history may be problematic if you\u2019re looking for a commercial mortgage as some lenders will want to see evidence of a strong track record in the industry - so specialist advice is essential if you\u2019re a first-time investor.\n<h4>The size of the loan<\/h4>\nCommercial mortgages usually start at \u00a325,000 but you\u2019re more likely to find favourable rates if your mortgage is for a larger amount, simply because your choice of approachable lenders will be fewer if the sum you\u2019re looking to borrow is the minimum.\n\nFor further information about how to qualify for the cheapest commercial mortgage rates <a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-commercial-mortgage-specialist\/">get in touch<\/a> and the advisors we work with will connect you to the best lender.\n<h2 id="rates-terms">Commercial property mortgage rates and terms<\/h2>\nCommercial mortgage terms can vary between three and 40 years, but most tend to fall into the 15-30 year bracket. The length of the term you\u2019re given will affect the total amount of interest you pay throughout the duration of the business mortgage loan.\n\nWhile a longer term means smaller monthly payments, you will end up paying more in interest if you spread the debt over a longer period. The advisors we work with can help you determine what kind of term length is right for you, based on your needs and affordability.\n<h2 id="comparison">How do I carry out a comparison of business mortgage rates?<\/h2>\nSome lenders use a different commercial mortgage rates calculator to others, so the amount you can borrow and the rates you qualify for will be different across the board.\n\nApproaching a number of different providers isn\u2019t the way to go about a commercial mortgage interest rates comparison as having too many hard searches on your credit file can be detrimental to your credit rating, not to mention how much legwork this involves.\n<h3>Is there a better alternative to using a commercial mortgage calculator?<\/h3>\nThe best way to search the market for the best rates is to make an enquiry with a whole-of-market commercial broker and have them compare commercial mortgage interest rates for you. That way, you will have access to all of the best deals you\u2019re eligible for.\n\nGet in touch and the advisors we work with introduce you to the lender offering the best commercial mortgage deals you\u2019re eligible for.\n<h2 id="small-busi">Are small business commercial mortgage rates any different?<\/h2>\nNo, generally speaking, small businesses have access to all of the same commercial mortgage products as larger operations and the rates they will be offered are usually no different, as long as the lender is happy with the level of risk. The risk will be assessed in much the same way as for larger businesses, based on the same eligibility checks.\n\nThings will only be different if your small business is a start-up or a Limited Company. With new operations, additional security and a strong business plan may be required to make up for the lack of trading history, while Ltd Company borrowers may be asked to present personal guarantees from the directors as well as debentures.\n<h2 id="same-across">Are commercial mortgage rates any different around the UK?<\/h2>\nAs commercial lending is bespoke, there are no hard and fast rules about how mortgage rates differ in England compared to Ireland, Scotland and Wales.\n<h3>Commercial mortgage rates in Scotland<\/h3>\nThere may be postcode restrictions north of the border, as some commercial lenders won\u2019t lend for properties in the Scottish Highlands or away from the mainland, but generally speaking, it may be possible to find favourable commercial mortgage rates in Scotland.\n<h3>Commercial mortgage rates in Northern Ireland<\/h3>\nAttractive commercial mortgage rates in Northern Ireland, however, are somewhat more difficult to come by as far fewer lenders operate there. This is why specialist advice from a whole-of-market broker is essential to ensure you end up with the best deal.\n<h2 id="speak-to">Speak to an expert on business mortgage interest rates<\/h2>\nIf you have questions about mortgage rates for business property and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or <a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-commercial-mortgage-specialist\/">make an enquiry <\/a>online.\n\nThen sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. They can connect you to the lender offering the lowest commercial mortgage rates you qualify for.\n\nWe don\u2019t charge a fee and there\u2019s absolutely no obligation or marks on your credit rating.