Commercial mortgage rates, by leverage and by asset.
Indicative whole of market pricing for September 2026, laid out the way lenders actually think about it: by loan to value first, then by what the building is and who is paying the rent. Not a single headline number, because a single number is always somebody's best case.
By Dominic Whitecross, Co-Founder, HyLend. Last reviewed September 2026.
The short answer
Commercial mortgage rates in the UK currently start at around 5.9% a year for low leverage, standard assets and strong income, and rise through the 7% to 9.5% range as loan to value climbs and the asset or covenant weakens. Most commercial lending is priced as a margin over base rate or SONIA on a variable basis. Fixed rates of two to five years are available at a premium.
The ranges below are what we see across the whole market as at September 2026. They are indicative, they move, and the right way to use them is to understand where your deal sits and why, not to expect the lowest number.
Indicative rates by loan to value
| Loan to value | Indicative annual rate from | Who typically qualifies |
|---|---|---|
| Up to 55% | 5.9% | Low leverage, standard asset, strong income and borrower |
| 55% to 65% | 7.1% | Most owner occupiers and good investment property |
| 65% to 70% | 8.3% | Higher leverage or a weaker asset, covenant or borrower |
| 70% to 75% | 9.5% | Maximum leverage, specialist lenders, additional structuring |
Indicative whole of market ranges, September 2026, consistent with the pricing used in our calculator. Individual lenders sit outside them in both directions.
Leverage is the strongest lever you control. Dropping from 70% to 60% LTV can move the rate by more than a point, and it is often the cheapest change you can make to a quote. How much deposit a commercial mortgage needs →
How the asset and the income move the rate
| Asset and situation | Typical effect on pricing |
|---|---|
| Owner occupied premises, established trading business | Best pricing, widest lender pool, high street banks compete |
| Let industrial or office, strong covenant, long unexpired lease | Close to best pricing |
| Let property, short unexpired lease or weaker tenant | Higher margin, lower leverage, or both |
| Semi commercial | Slight premium to residential investment pricing |
| Care homes, hotels, pubs, holiday parks | Specialist lenders, priced on trading performance |
| HMOs valued on a commercial basis | Specialist lenders, priced close to commercial investment |
| Land and development sites | Bridging or development pricing rather than term rates |
For investment property, the tenant is the rate. A ten year lease to a strong covenant and an eighteen month lease to a small business on the same building are two different loans, and regearing the lease before you apply is frequently worth more than any rate negotiation afterwards. Industrial and warehouse finance →
Fixed or variable, and what the fees do to the real rate
Variable rates track base rate or SONIA plus a margin and move with the market. Fixed rates buy certainty for two to five years at a premium and almost always carry early repayment charges. If the plan involves a sale or refinance inside the fixed period, the charge can cost more than the certainty is worth.
Fees change the comparison more than most borrowers expect. An arrangement fee of 2% on a five year facility adds roughly 0.4% a year to the effective cost. A 6.5% rate with a 2% fee and a 6.9% rate with no fee are close to identical over five years, and the second is cheaper if you redeem in three. Compare the full cost, fees included →
What a quote should tell you and usually does not
The rate, the margin and index if variable, the arrangement fee, the early repayment charge and when it falls away, and which valuation figure the loan to value is a percentage of. The last one changes the loan size more than the rate changes the cost.
Refinancing to a better rate
Rates move and so do lenders. If your facility is coming off a fixed period, if you are paying a bridge or development rate on a completed asset, or if your income has improved since the loan was written, a refinance is often the biggest single saving available. Commercial mortgage refinance →
Indicative only and not an offer of credit. Pricing depends on the lender, the asset, the leverage, the exit and the borrower, and it can change at any time. HyLend is a credit broker, not a lender.
Commercial mortgage rate FAQs
What are commercial mortgage rates in the UK right now?
Indicatively from 5.9% a year for the strongest cases at low leverage, rising through the 7% to 9.5% range as loan to value increases and the asset or covenant weakens. Most commercial lending is priced as a margin over Bank of England base rate or SONIA on a variable basis, with fixed rates available for two to five years at a premium. The figures on this page reflect whole of market indications in September 2026 and are updated as the market moves.
Why are commercial mortgage rates higher than residential?
Because the risk is different in kind. A commercial lender is exposed to a business or a tenant rather than a household, to a building with a narrower pool of buyers, and to a loan that is often interest only. Regulation also differs: most commercial lending sits outside the consumer protections that shape residential pricing. The spread over residential rates is the price of that risk, and it narrows for strong owner occupiers with long trading records.
What decides the rate I will be offered?
Five things in roughly this order. Loan to value, because leverage is the strongest single lever. The asset, with standard premises and let industrial pricing best and specialist or trading assets pricing higher. The income, meaning the tenant covenant and unexpired lease for investment property or the accounts for an owner occupier. The borrower, including experience, net worth and credit. And the structure, since fixed rates, longer terms and interest only each carry a premium.
Should I choose a fixed or variable commercial mortgage rate?
It depends on what you are protecting. A fixed rate buys certainty over your monthly cost for two to five years at a premium to the variable margin and usually with early repayment charges. A variable rate tracks base rate or SONIA and suits borrowers who expect to sell or refinance inside the fixed period or who can absorb movement. Where the plan involves a sale or refinance in the next three years, the early repayment charge on a fix can cost more than the certainty is worth.
What fees are charged on top of the rate?
A lender arrangement fee of 1% to 2% of the loan, a valuation fee paid up front, legal costs on both sides, sometimes an exit or early repayment charge, and any broker fee. On a five year facility the arrangement fee alone adds roughly 0.2% to 0.4% a year to the effective cost, so comparing headline rates without fees is not comparing the loans.
Can I get a commercial mortgage at 5.9%?
At low leverage, on a standard asset, with strong income and a clean borrower profile, yes. That is where the entry rate sits in the current market. Move any of those four variables and the rate moves with it. Most real cases land somewhere in the 6.5% to 8.5% range, and anyone quoting the entry rate without seeing the asset is describing their best case rather than your deal.