Product types
Commercial mortgage
Loan secured by a first charge on UK commercial property, used to buy, refinance or release equity from a building used for business purposes.
Commercial mortgage is the generic term for a loan secured by a first charge on UK commercial property. The borrower can be a company, individual, partnership, LLP or pension trustee. The property can be owner-occupied or investment, single-asset or part of a portfolio. The defining feature is that the property is used for business purposes, which puts the loan outside the FCA-regulated mortgage perimeter and into the unregulated lending space.
The four main UK commercial mortgage products
- Owner-occupier commercial mortgage: the borrower’s own trading business occupies the property. Sized off business EBITDA. See owner-occupier commercial mortgage.
- Investment commercial mortgage: the property is let to a third-party tenant. Sized off the rent. See investment commercial mortgage.
- Semi-commercial mortgage: mixed-use property with commercial and residential elements. See semi-commercial mortgage.
- Commercial bridging: short-term loan, 1 to 24 months, priced monthly. See commercial bridging.
What “commercial property” actually covers
The UK commercial mortgage market lends against:
- Office buildings (single-let, multi-let, serviced office).
- Industrial and warehousing (single units, estates).
- Retail (high street, shopping parade, retail park).
- Mixed-use (shop with flat above, pub with accommodation).
- Hospitality (hotels, pubs, restaurants, B&B).
- Healthcare (care homes, dental and medical practices).
- Leisure (gyms, day nurseries, holiday parks).
- Specialist (kennels, marinas, religious buildings).
What it does not cover: pure residential investment (BTL, HMO above a residential threshold, build-to-rent), which sits in the BTL or specialist BTL market. The dividing line is whether the property is genuinely commercial in use, not whether it is held in a corporate vehicle.
Why commercial mortgages are unregulated
UK regulated mortgages are residential first-charge mortgages where the borrower or an immediate family member occupies more than 40% of the property as a dwelling. Commercial mortgages sit outside that perimeter because the use is business rather than residential. This means commercial mortgages are not subject to FCA conduct rules on advice, suitability or affordability. Brokers and lenders operate under a different (lighter) regulatory regime that focuses on financial promotions and anti-money-laundering rather than retail consumer protection.
This is why an FCA-authorised mortgage broker is not necessarily authorised on commercial. Different perimeter.