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Mortgage Terms on Commercial Lending

The complete guide to average mortgage terms on commercial borrowing, the impact of your term on your total repayment costs, and how to choose the right term for your business.

Mortgage Terms on Commercial Lending

The Revolution team often deals with clients seeking a commercial mortgage, and wanting to know where and how to get the lowest mortgage rates!

This includes considering the length of the mortgage term and balancing out the cost of your borrowing repayments against commercial mortgage rates, and the impact on your cash flow balances.

Here we have summarised the most important criteria for achieving competitive commercial lending, but if you need further information or would like to enquire, please give the team a call on 0330 304 3040 or drop us a message to [email protected].

How Long do Typical Commercial Mortgages Run For?

Average terms vary and can last up to 25 years in line with typical residential mortgages, although maybe as little as three years or as long as 30.

If you need short-term mortgage lending on a commercial property, for less than three years, this is deemed a bridging loan.

Commercial Mortgage Calculator

Property or loan details



Error: Property must be valued at £50,000 or more.

Error: Estimated rental income must be between £1 and £99,999.

Based on your details, you can borrow up to: £0

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

How are Commercial Mortgages Different from Residential?

Generally speaking, lenders can offer more flexibility when it comes to the mortgage term.

Most residential mortgages run from 25 to 35 years, although commercial lending can be much shorter if required.

Can I Get a Commercial Mortgage with Fixed Rates?

Indeed you can; commercial mortgage lenders usually offer an option between variable rate products and fixed-rate mortgages.

Most lenders offer a fixed rate at a discount from two years, and sometimes for the whole duration of the mortgage term.

In many cases, if your fixed rate ends, it is more economical to look for a refinancing option or remortgage, depending on the standard variable rate offered.

Does the Length of my Commercial Mortgage Term Impact the Interest Rates?

Not really. Lenders consider each commercial mortgage on its own merit, and the length of the term isn't a primary factor when considering what interest rates to offer.

For example, if you compared quotes for a 10-year and 15-year fixed-rate commercial mortgage, the interest rates offered are likely to be similar to those on a 30-year term, if no other circumstances have changed.

However, you will find that the length of the introductory rate can vary. The cheapest overall commercial mortgages are often those with a longer fixed-rate at the start of the term.

How Can I Get the Lowest Commercial Mortgage Interest Rates?

The critical factor when looking for an affordable commercial mortgage is to work with an experienced lender. Independent, whole-of-market brokers such as the mortgage brokers team have access to all lenders across the entire sector and can negotiate competitive deals on your behalf.

Many commercial mortgages are unregulated, which means greater flexibility when it comes to eligibility criteria, but the essential factors include:

  • Business Profits: A lender will look at your business performance and earnings. While there aren't fixed minimum earning levels, they will want to assess whether the company can afford the mortgage.
  • Deposit or Security: Most commercial mortgage lenders look for a deposit from 20% and as high as 40%. You can also offer additional security - this reduces the risk factor and usually means being able to borrow at a higher LTV ratio and achieving lower interest rates.
  • Experience: If you are investing in a property as part of a business plan, a commercial lender may ask about your experience in your industry, how established the business is, and what your projected future performance looks like. Still, some lenders specialise in mortgages for start-ups and new businesses.
  • Credit Rating: Each lender will look at your credit score to carry out a risk analysis. You can work with a niche bad credit commercial lender if the company has suffered any adverse credit ratings in the past.

How Important is the Length of my Commercial Mortgage on the Overall Costs?

The longer your mortgage, the more instalments you make, and the more interest you pay in total. On balance, this does mean a lower monthly payment, which may be the priority.

Our table below considers a commercial mortgage of £400,000, with a 4% interest rate, and how the overall cost changes depending on the length of the term.

Mortgage Term

Monthly Repayment

Total Cost

5-year fixed rate

£7,367

£441,997

10-year fixed-rate

£4,050

£485,977

15-year fixed-rate

£2,959

£532,575

20-year fixed-rate

£2,424

£581,741

25-year fixed-rate

£2,111

£633,404

30-year fixed-rate

£1,910

£687,478

This illustrates how shorter-term costs more per month but overall is a more cost-effective option.

Businesses might choose to pay more in total in return for the lower monthly repayment, as this all depends on your cash flow and capital requirements.

To compare different mortgages, total costs, and calculate monthly repayments, give the Revolution team a call on 0330 304 3040.

Expert Commercial Mortgage Advice

If you are looking for a commercial mortgage, want to compare products, or need advice about the best lenders to apply to, get in contact.

We are available on 0330 304 3040, or via email at [email protected].

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