Commercial Mortgages for Retail Premises
By Joshua Giles, Founder and Director · Reviewed by the CoreFi credit team
Last updated 20 July 2026
CoreFi is a broker, not a lender. We do not set rates and lenders make all credit decisions.
In short: £50k - £5M over 15 - 25 years. A commercial mortgage on retail premises runs on first-charge security against the property, usually at 65-75% LTV, repaid over 15 to 25 years.
A commercial mortgage on retail premises runs on first-charge security against the property, usually at 65-75% LTV, repaid over 15 to 25 years. The lender's first question is serviceability. They want to see the trading income or passing rent cover the monthly payment comfortably, typically at a DSCR of 1.25x or better.
For an owner-occupier, run the rent comparison properly. A £400k purchase at 70% LTV over 20 years lands somewhere around £1,600 to £1,900 a month depending on the rate, and plenty of retailers paying market rent are already close to that. One of those routes builds equity in an asset you own at the end of the term. The other does not.
Lenders have tightened on retail since 2020, and we will be straight with you about it. Secondary high street units in struggling town centres, fashion and discretionary retail, and vacant shops with no trading covenant are harder to place and need more deposit. Prime pitch, essential retail (convenience, pharmacy, dental), and owner-occupiers with clean trading accounts are where the appetite sits. We track which lenders are actively backing retail and which have quietly stepped back, because that shifts month to month.
Mixed-use, a shop with a flat above, is often the cleaner deal. The residential rent can underpin the DSCR, and some lenders assess both elements together at better blended terms.
Key Benefits
- LTV up to 75% on prime owner-occupied retail, so the deposit requirement starts at 25% of the purchase price
- Serviceability is assessed on trading income or passing rent, not personal salary, which matters for limited company purchasers
- Mixed-use properties (shop plus residential above) are routinely accepted and can strengthen the case through diversified income
- You own the freehold: no rent reviews, no lease renewal risk, and no landlord able to redevelop out from under you
- Investment purchases, where you own the unit and let it to a retail tenant, are financeable, though appetite varies sharply by location & covenant strength
Frequently Asked Questions
Is it better to buy or rent retail premises?
If you plan to trade from the same location for five or more years, the numbers usually favour buying. Mortgage payments build equity in an asset you own outright at the end of the term; rent builds nothing. The counterweight is flexibility: owning ties you to that pitch, and selling a retail unit is not always quick. Run the rent-versus-mortgage comparison on your actual figures before committing.
What about mixed-use properties, a shop with a flat above?
Mixed-use is routinely financed and is often a cleaner deal than pure retail. Some lenders will assess the residential rental income alongside the commercial income when calculating serviceability, which can improve the terms on offer. We place these regularly.
Do lenders still lend on high street retail?
Yes, but appetite is location-dependent. Essential retail (convenience, pharmacy, health services), prime pitch, and owner-occupiers with at least two years of clean trading accounts are where most lenders are comfortable. Secondary locations or units reliant on discretionary footfall typically face lower LTV limits and more scrutiny. We will tell you honestly which category your property falls into before you spend time on an application.
Can I include extension or conversion costs in the mortgage?
Some lenders will consider including refurbishment or conversion costs within the facility, particularly where the works lift the end value and the loan-to-value still holds on the improved figure. Use class changes, for example A1 to residential, can complicate the lending and affect what a lender will offer, so flag that upfront.
Work out your numbers
Related Funding Options
Commercial Mortgages UK: Buy or Refinance Business Property
Long-term finance for buying or refinancing commercial property in the UK. We place commercial mortgages on offices, warehouses, retail units, and mixed-use premises for limited companies.
Retail Fit-Out & Expansion Loans (Unsecured)
Stock, fit-out & expansion funding for UK retailers with no property security required. We place unsecured business loans from £5k to £250k for high street & online shops.
Merchant Cash Advance for Retail Businesses
UK retailers can borrow against future card sales, repaying a percentage of daily takings rather than a fixed monthly sum. See how a merchant cash advance works for retail and what it actually costs.
Commercial mortgages by location
Lender appetite varies by city and region. If you would rather start from where your business is based, these local guides cover the same funding with the local picture.
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Get matched with lendersCoreFi is a trading name of JG Core Ltd (Company #16218779, England & Wales). CoreFi acts as a commercial finance broker and does not provide regulated financial advice. All products described are unregulated business-to-business finance. Information on this page is for general guidance only and does not constitute a formal offer of finance. Terms, rates, and availability are subject to lender criteria and may change without notice.