“How much will my commercial mortgage cost per month?” / “How much deposit and cash do I need to buy a commercial property?” / “Is it cheaper to buy my business premises or keep renting?” / “What SDLT do I pay on commercial property?” / “What interest rate can I expect on a UK commercial mortgage in 2026?”
| Parameter | Typical range | Notes |
|---|---|---|
| BoE base rate | 3.75% | Held March 2026 (MPC unanimous) |
| Commercial mortgage rates | 5.25%–7.75% | Standard deals; prime owner-occupied from ~4.5% |
| High-risk / specialist | Up to 8%–14% | Complex, high LTV, or unusual property types |
| LTV (owner-occupied) | 60%–80% | Up to 80% for strong cases |
| LTV (investment) | 60%–70% | Typically capped at 65–70% |
| Term | 15–25 years | Range 5–30; 20 years most common |
| Arrangement fee | 1%–2% of loan | Some lenders charge flat fee instead |
| Valuation fee | £1,000–£5,000+ | Depends on property value and complexity |
| Legal fees | £2,000–£5,000 | Borrower pays own + lender’s solicitor |
| Survey / due diligence | £1,000–£3,000+ | Building survey, environmental, asbestos |
| Interest cover ratio (investment) | 125%–150% | Rental income must exceed interest by this margin |
| Stress test rate (investment) | 6%–8% | Lenders test affordability at higher assumed rate |
Monthly repayment (capital & interest):
M = P × [r(1+r)^n] / [(1+r)^n − 1]
P = loan amount, r = annual rate / 12, n = term × 12
Monthly interest-only:
M = P × annual rate / 12
Capital repaid at end of term
Commercial SDLT:
£0–£150K: 0%
£150K–£250K: 2% on portion
£250K+: 5% on portion
Total = sum of band calculations
Total upfront cost:
Deposit + SDLT + Arrangement fee + Valuation + Legal + Survey
Break-even (rent vs buy):
Months = Total upfront / (Monthly rent − Monthly mortgage)
Only valid when mortgage < rent
10-year rent projection:
Year N rent = Year 1 rent × (1 + annual increase)^N
Total = sum of all years
Equity after 10 years:
Principal repaid + Property appreciation + Initial depositDifferentiation sum.money: