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What are commercial mortgage interest rates?

Commercial mortgage interest rates are used to calculate the fees you pay to borrow money from a lender for a commercial mortgage loan. Currently, commercial mortgage rates can be at least 3% above the Bank of England’s annual base rate.

Commercial rates vary from lender to lender, with the maximum being around 13% per annum. There are no set rates for commercial mortgages, so lenders will thoroughly check the application and determine the rate based on its merits.

How are commercial mortgage rates determined?

Lenders will consider several factors when deciding on a commercial mortgage rate. These include the loan to value (LTV) of the property, the finances of the business and the loan amount required.

Whether you intend to be an owner-occupier or are buying the property as an investment to rent out will also determine the rates you have access to.

Your credit history and, if you are an owner-occupier, the strength of the business, will also be considered. You may also be asked to provide personal guarantees, depending on how long your business has been in business.

Another factor to consider, when it comes to commercial mortgages, is the type of rate. Fixed rates will be fixed at a certain amount for a specific period of time. Trailing rates are generally tied to the Bank of England base rate and floating rates are tied to the lenders standard floating rate and may vary depending on business decisions made by the lender.

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