Can you get a commercial mortgage on a hotel or guest house?
Yes. Hotels, guest houses and bed-and-breakfast businesses are funded by specialist commercial lenders across the UK. Like pubs and restaurants, they are trade-related assets — the property and the business are inseparable — so lenders assess occupancy, revenue and profit alongside the bricks and mortar. A commercial mortgage on a well-trading hotel is achievable, provided it is placed with a lender that understands hospitality.
This is a specialist sector, and matching the deal to the right lender is the single biggest factor in getting sensible terms.
How much deposit do you need for a hotel?
Because income is tied to a trading business, deposits sit above mainstream commercial levels:
- Established hotels with strong accounts: around 30% to 35%.
- New operators or first-time buyers: often 40% or more.
- Seasonal or coastal properties: may need a larger deposit to reflect variable trade.
How are hotels valued?
Hotels and guest houses are almost always valued on a going-concern basis, reflecting fair maintainable trade rather than the building alone. The valuer looks at:
- Occupancy rates across the year.
- Average room rate and revenue per available room.
- Additional income from food, drink, events and functions.
- Profit after realistic running costs and staffing.
This means a tired hotel with weak trade will be valued below a similar property that is well run and busy, even if the buildings are identical.
Seasonality and location
Many UK hotels and guest houses are seasonal, particularly in coastal and rural tourist areas. Lenders account for this by focusing on sustainable annual profit rather than peak months. A property in a strong year-round location or with a reliable corporate customer base is generally easier to fund than one that trades hard for a few summer months and sits quiet the rest of the year.
What do lenders want to see?
To fund a hotel or guest house, expect to provide:
- Two to three years of trading accounts, or a detailed business plan for a new venture.
- Occupancy and revenue data.
- Details of any franchise, brand affiliation or booking arrangements.
- Your experience in hospitality management.
- The property title and condition, plus any refurbishment plans.
How do you fund a hotel purchase efficiently?
Hospitality is specialist, so the right lender match is everything. Assesr takes your figures and builds a lender-ready credit paper in around 60 seconds, then matches it to specialist commercial lenders that fund hotels and guest houses. You pay a 0.5% Assesr Fee on drawdown — a quarter of the typical broker fee — with nothing until completion.
If a hotel needs significant refurbishment before it can prove its trade, a short-term bridge to renovate and reopen, followed by a term mortgage, is often the sensible structure. Compare the options in our guide on when to use bridging versus a mortgage.
Frequently asked questions
Can I get a commercial mortgage on a hotel or guest house?
Yes. Specialist lenders fund hotels, B and Bs and guest houses, assessing the property alongside occupancy, revenue and profit as a going concern. Deposits are typically higher than mainstream commercial because the income depends on the trading business.
How much deposit do I need for a hotel?
Usually 30% to 40% of the price. Well-established hotels with strong, evidenced trading can achieve the lower end, while new operators or seasonal properties may need more to reflect the variability of income.
Do lenders count the business income or just the building?
Both. Hotels are valued on a going-concern basis reflecting fair maintainable trade, so occupancy, revenue per room and profit drive the value and therefore the loan available. Strong, evidenced trading is the best way to improve your terms.