What are commercial mortgage rates in 2026?
In 2026, UK commercial mortgage rates are typically priced as a margin above the Bank of England base rate, or offered as a fixed rate for a set period. As a general guide, most deals land in the region of 6 to 9 percent per annum, though stronger deals with prime assets and solid covenants can price lower, and riskier or specialist cases can price higher. Unlike residential mortgages, commercial rates are usually assessed and priced deal by deal rather than from a fixed rate card.
Fixed versus variable commercial rates
You can usually choose between a variable rate that tracks a reference rate, such as base rate plus a margin, and a fixed rate that locks your rate for a period. A variable rate moves with the market, so payments can rise or fall. A fixed rate gives certainty over your costs for the fixed period, which many businesses value for budgeting, but may come with early repayment charges if you exit early.
What drives the rate you are offered?
Several factors influence pricing:
- LTV: lower loan-to-value usually means a better rate, as covered in our deposit and LTV guide
- Asset type: standard, lettable property prices better than niche or specialist assets
- Covenant strength: a strong tenant or profitable business reduces risk and rate
- Term and structure: repayment versus interest-only, and the length of the term
- Borrower profile: experience, credit history, and financial strength
- DSCR: comfortable coverage, explained in our DSCR guide, supports keener pricing
What fees come with a commercial mortgage?
The rate is only part of the cost. Typical fees in the UK market include:
- Arrangement fee: commonly 1 to 2 percent of the loan, often added to the balance
- Valuation fee: from a few hundred pounds to several thousand, depending on the property
- Legal fees: your own solicitor plus, frequently, the lender's legal costs
- Broker or platform fee: traditionally 1 to 2 percent of the loan
- Exit or early repayment fees: charged by some lenders if you redeem early
How the broker fee stacks up
The broker fee is one of the largest avoidable costs in a commercial mortgage. On a 500,000 pound loan, a 2 percent broker fee is 10,000 pounds. This is where Assesr changes the maths: instead of the typical broker fee, you pay the 0.5% Assesr Fee, payable on drawdown, nothing until your deal completes. On that same loan, that is a quarter of the typical broker fee, freeing up capital for your business.
Total cost of borrowing: a worked example
Imagine a 500,000 pound investment property with a 70 percent LTV loan of 350,000 pounds:
- Deposit: 150,000 pounds
- Interest at, say, 7.5 percent on 350,000 pounds: around 26,250 pounds a year on interest-only
- Arrangement fee at 1.5 percent: 5,250 pounds
- Valuation and legals: often several thousand pounds combined
- Platform fee at 0.5 percent: 1,750 pounds, versus 7,000 pounds at a 2 percent broker fee
The rate drives your ongoing cost, but the fees drive your upfront cost, and the broker fee is where the biggest savings usually sit.
How to reduce the cost of your commercial mortgage
- Increase your deposit to reach a lower LTV band and a better rate
- Strengthen the covenant with a stronger tenant or cleaner accounts
- Compare the whole market rather than accepting the first offer
- Cut the broker fee by using a lower-cost matching platform
Assesr builds a lender-ready credit paper in around 60 seconds and matches your commercial mortgage to specialist lenders competing on rate, at a quarter of the typical broker fee.
Frequently asked questions
What are typical commercial mortgage rates in 2026?
Commercial mortgage rates are usually priced as a margin above the Bank of England base rate or as a fixed rate, commonly landing in the region of 6 to 9 percent per annum, depending on the deal, asset, and borrower strength.
Are commercial mortgage rates fixed or variable?
Both are available. Variable rates track a reference rate such as base rate plus a margin, while fixed rates lock in a set rate for a period. Fixed deals give certainty; variable deals move with the market.
What fees come with a commercial mortgage?
Expect an arrangement fee of typically 1 to 2 percent, valuation fees, legal fees for both sides, and a broker or platform fee. Some lenders also charge exit or early repayment fees.