Why many UK businesses choose commercial mortgages

For many business owners, buying their premises offers long-term stability and the chance to build an asset rather than paying rent to a landlord. Over time, property ownership can create wealth, provide security for future borrowing, and offer greater control over how the space is used. For investors, commercial property can deliver strong rental yields and portfolio growth when chosen carefully.

Typical commercial mortgage terms in the UK

Commercial mortgages are generally offered over terms ranging from five to twenty-five years. Interest rates tend to be higher than residential mortgages because of the increased risk, and they may be fixed for a period or variable depending on the lender and market conditions. Borrowers can usually choose between full capital repayment, where the loan is gradually paid off, or interest-only options, which keep monthly costs lower but leave the original balance outstanding.

There are also additional costs to factor in, such as valuation fees, legal fees and lender arrangement charges. While these can seem high initially, many businesses see long-term ownership as more cost-effective than paying rent year after year.