What Are UK Commercial Mortgage Rates?

There’s no single rate card to check, no best-buy table the way there is for residential mortgages. Every commercial mortgage is priced individually, against the specific property, the specific business, and the specific deal, which is exactly why two seemingly similar applications can land 3-4 percentage points apart. That said, a genuine range exists and understanding it helps you judge whether a quote you’ve received is competitive or not.

Bank of England held base rate at 4.25% in June 2026 - waiting for inflation to cool.

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So, what’s the typical rate range?

Across the UK market, commercial mortgage rates generally fall somewhere between 5% and 9.5% per annum for fixed-rate products, with the strongest applications, low LTV, established businesses, prime property, sometimes accessing rates from around 5%-5.5%. Variable rates are typically priced as a margin of 2%-5.5% over the Bank of England base rate, which has been sitting in the region of 3.75%-4.5% through 2026.

Why is the range still so wide?

Because commercial mortgage pricing is genuinely bespoke, built from a combination of factors specific to each deal:

• Loan-to-value. Lower LTV consistently earns more competitive pricing, a 40% deposit typically achieves better terms than a 25% deposit on an otherwise similar deal.
• Owner-occupier vs investment. Owner-occupied purchases, particularly for professional practices with strong trading covenants, often access the lower end of the range, sometimes 5%-7.5% fixed. Investment property, especially at higher LTVs, tends to sit higher, commonly 6%-9%.
• Property type. Standard commercial property attracts sharper pricing than specialist or unusual assets.
• Business financial strength. Established businesses with strong cash flow and clean accounts access more competitive terms than newer or less established ones.

Why do fixed rates follow SWAP rates rather than the base rate?

This is one of the more commonly misunderstood parts of commercial mortgage pricing. Fixed-rate commercial mortgages are priced against SWAP rates, a market measure reflecting where interest rates are expected to average over the length of your fix, two, three, or five years, rather than tracking the Bank of England base rate directly. Variable and tracker products, by contrast, do move in line with the base rate.

This distinction explains why fixed commercial mortgage pricing can shift even when the base rate hasn’t moved at all, SWAP rates are forward-looking, reacting to what the market expects, sometimes well ahead of an actual Bank of England decision.

Does this mean fixed rates are always more expensive than variable?

Not necessarily, it depends on where SWAP rates and the base rate sit relative to each other at the time you’re borrowing. Fixed rates offer payment certainty for the length of the fix, useful if you want protection against future rate rises, while variable rates can work in your favour if rates fall during your term, but carry the risk of rising payments if they don’t.

What’s a realistic example of how much LTV moves the rate?

A strong owner-occupier application at 60% LTV or below with clean financials might access fixed rates from around 5%-6%. The same borrower stretching to 75%-80% LTV on the same property type would likely see rates closer to 7%-9%, reflecting the additional risk the lender is taking on with less deposit behind the loan.

Are rates the whole cost picture?

No, arrangement fees, valuation costs, and legal fees all add to the total cost beyond the headline rate, and these can materially affect the true cost in the first year of the mortgage. Always compare the all-in cost across quotes, not simply the advertised percentage.

Why does comparing across multiple lenders matter so much here?

Because two applications on genuinely similar commercial properties can attract rates several percentage points apart, depending entirely on which lender is assessing the deal and how their specific criteria align with your circumstances. A broker with access to a broad panel can typically negotiate more competitive terms than approaching a single lender directly, since different lenders price identical risk very differently depending on their own current appetite.

The mistake borrowers often make

Some borrowers accept the first quote received, assuming it reflects the market broadly, without checking how SWAP-driven fixed pricing or variable margins compare across other lenders genuinely interested in the same type of deal. Given how much commercial mortgage pricing can vary for essentially similar cases, that habit can mean paying considerably more than necessary over the life of the mortgage.

The bottom line

UK commercial mortgage rates typically range from 5% to 9.5% fixed, or base rate plus 2%-5.5% variable, with the exact figure shaped by LTV, property type, and business strength far more than by any single published rate. Understanding that fixed pricing tracks SWAP rates rather than the base rate explains a lot of the movement you’ll see quoted between lenders. Money Pilot’s compares how SWAP-driven fixed rates move across its panel, helping borrowers see where their specific deal genuinely sits within the current market range rather than judging a single quote in isolation.