Semi-commercial mortgage rates

Semi-commercial mortgage rates in 2026

A semi-commercial mortgage is priced like a commercial loan, on the asset and its income rather than a salary. In mid-2026 the indicative bands are:

These are indicative and typical for mid-2026, not firm quotes. The rate any lender offers depends on the specifics of the deal.

What drives your rate

• Loan to value: a 75 percent loan prices above a 60 percent one
• The commercial covenant and the strength of the residential rent
• The commercial-to-residential split and the use class
• Owner-occupier versus investment
• The borrower: experience, credit profile and structure
• Whether you fix the rate or take a variable margin

Improve any of these, by adding deposit or evidencing stronger rent, and the rate improves with it.

How a semi-commercial rate is calculated

Most semi-commercial mortgages are priced as a margin over a reference rate, so the headline figure combines the lender's margin with the underlying base rate. A minority offer a fixed rate for an initial period.

The margin reflects the lender's view of risk on your specific deal. A lower loan to value and a diversified, well-let mixed-use asset attract a tighter margin.

Fixed versus variable rates

A fixed rate sets the cost for an initial term, removing uncertainty at a small premium. A variable rate tracks a reference rate, so it moves with the wider environment.

Investment versus owner-occupier pricing

Owner-occupier deals, where you trade from the commercial unit, tend to price toward 6.0 to 7.5 percent, because the lender takes comfort from the business using the premises and from the borrower's own stake in keeping it running.

Investment deals, where both parts are let, price across 6.5 to 8.5 percent and are sized on the combined rent at an interest cover ratio. A limited company or SPV is the usual structure for investment borrowing, and it does not carry a meaningful rate penalty on these assets.

Where an individual borrower will personally occupy the residential element, the loan can fall under FCA-regulated rules, and we refer those cases to a regulated firm. The pricing above is for unregulated business and investment lending.

The fees beyond the rate

The rate is only part of the cost. Budget for:

We set out the all-in cost of every offer, not just the rate, so a cheaper headline with heavier fees does not win on the wrong number.

How the wider rate environment feeds in

Because most semi-commercial mortgages are priced as a margin over a reference rate, the underlying base rate flows straight into what you pay. When base rates are higher, semi-commercial borrowing is dearer across the board and lenders test affordability against tougher stress rates.

A deal that works at today's rates with headroom is more fundable than one that only works if rates fall. Where you expect rates to ease, a variable margin keeps you exposed to that fall; where you need certainty, a fix locks the cost for the initial term.

How to get the best semi-commercial rate

1. Put down more deposit to bring the loan to value down
2. Evidence strong, well-documented rent from both parts
3. Present a clean covenant on the commercial tenant
4. Choose fixed or variable to match your view on rates
5. Run the deal across the whole panel, not one bank

That last point is our job: we model the case and place it with the lenders that back your asset at the keenest rate.

Margin over reference rate

A variable price made of the lender's margin plus an underlying base or reference rate.

Interest cover ratio (ICR)

The ratio of rent to mortgage interest a lender requires, commonly 125 to 140 percent stressed on investment cases.