Top 10 Lenders for an £850,000 Commercial Mortgage in 2026

A commercial mortgage is a loan secured against a business property rather than a residential one. With an £850,000 facility, the lender provides the funds either to purchase a commercial property or to refinance an existing one, and you repay the capital plus interest over an agreed term, typically ranging from 5 to 25 years. The property itself acts as security, which means the lender can repossess it if you fall behind on repayments. Interest can be fixed for certainty or variable, and many lenders offer interest-only periods to ease cash flow in the early years. Once the term ends, you will have either fully repaid the loan or need to refinance any remaining balance.

Eligibility varies by lender, but most will look at the strength of your business, your trading history, and the property itself. Typically you will need at least two years of filed accounts showing stable or growing turnover, a clean credit history, and a deposit of around 25% to 40% of the property value. The property must be in good condition and ideally have a clear commercial use. Lenders also assess affordability, so they will want to see that your business generates enough income to comfortably cover the monthly repayments. Some specialist lenders may consider businesses with shorter trading histories or less-than-perfect credit, though rates may be higher.

Interest rates on commercial mortgages depend on several factors including your credit profile, the loan-to-value ratio, the property type, and the lender's own risk appetite. Rates can be fixed or variable and are often quoted as a margin above the Bank of England base rate. Repayment terms commonly range from 5 to 25 years, with some lenders offering up to 30 years for strong applications. Many commercial mortgages also include interest-only periods, which can help manage cash flow during the early stages of property ownership or while your business grows into the space. Always ask for a full breakdown of fees, including arrangement fees, valuation costs, and legal charges, as these can add significantly to the overall cost.

A commercial mortgage is designed for long-term property finance with terms of 5 to 25 years and typically lower interest rates, making it ideal for purchasing or refinancing business premises. A secured business loan, while also backed by property, can be used for broader purposes such as working capital or expansion and may have shorter terms of 1 to 10 years with slightly higher rates. Bridging finance is a short-term solution, usually lasting 3 to 24 months, intended to cover gaps in funding such as purchasing at auction or completing a refurbishment before securing long-term finance. Bridging loans are faster to arrange but carry higher interest rates and fees. For an £850,000 property purchase or refinance, a commercial mortgage is generally the most cost-effective option if you have time to go through a full application process.

Most UK commercial mortgage lenders will ask for a deposit of 25% to 40%, which translates to a loan-to-value (LTV) ratio of 60% to 75%. For an £850,000 commercial mortgage, this means the property would typically need to be valued at between roughly £1.13 million and £1.42 million, with your deposit covering the difference. Some specialist lenders may go up to 80% LTV for particularly strong applications or certain property types, but this is less common. The exact LTV offered will depend on the property type, its location, your business's financial strength, and your experience as a commercial property owner.

Start by looking at the overall cost, including the interest rate, arrangement fees, exit fees, and any early repayment charges. Beyond price, consider the lender's experience in your specific sector or property type, as specialist knowledge can make the process smoother. Check their speed of processing and whether they have a reputation for clear communication. Flexibility matters too: ask whether they offer interest-only periods, payment holidays, or the option to make overpayments without penalty. Finally, read reviews from other business owners and consider working with a commercial finance broker who can access lenders you may not find on your own and negotiate terms on your behalf.