Healthcare property refinance

Who healthcare property refinance is for

We work with owners across every healthcare and care asset who want to refinance the commercial property behind their business, almost always by moving their existing commercial mortgage to a better one. Some are coming to the end of a fixed term or an expiring facility and need to move to a new deal. Some want to release equity or raise capital from a building that has grown in value. Others simply want to review their borrowing and improve on the rate or terms they are currently paying. Commercial mortgages and other property loans can all be refinanced, and a single refinance can do more than one of these at once.

Refinancing a commercial property is a periodic discipline rather than a one-off event. As a facility approaches its end, as a building's value changes, or as the market moves, it is worth reviewing whether your current financing is still the best available. We will give you a clear, indicative view of where the market sits for your asset.

Releasing equity and raising capital

Where a healthcare building has grown in value, or the existing loan has been paid down, a refinance can release equity, turning part of the value in the property into capital you can use. Owners use that capital to fund an expansion, buy out a partner, invest in equipment, support working capital or acquire an additional site. The new facility is sized against the current value of the building and the income behind it, and the released equity is drawn at completion.

How much you can release depends on the loan-to-value a lender will support, which is driven by the current valuation and the strength of the income, whether that is NHS-backed reimbursement on a surgery, contract income on a pharmacy, or trading profit on a clinic or care home. We will tell you realistically how much equity is likely to be available and arrange the refinance around what you want to achieve.

Expiring facilities and improving your rate

An expiring facility, the end of a fixed term, or a loan reaching the end of its agreed period, is the most common trigger for a refinance. Rolling onto a lender's reversion rate, or being asked to repay or renew, is the moment to review the whole market rather than simply accept what your current bank offers. A refinance lets you move to a new facility on terms that reflect today's position rather than the one you took out years ago.

Improving the rate is a frequent goal, but the headline interest rate is not the whole picture. We weigh the rate against the term, whether it is fixed or variable, the loan-to-value, any fees and early-repayment terms, and the overall cost over the life of the commercial mortgage. A slightly higher rate on a longer, more flexible facility can be the better outcome. We will set out the comparison clearly so you can see the real cost, not just the headline.

Commercial mortgage rates and lending criteria

A healthcare refinance is usually arranged as a commercial mortgage, and commercial mortgage rates are not advertised like residential ones. They are priced to the deal, with the interest rate set over a reference rate and shaped by the loan-to-value, the strength of the business and the durability of the income. That is why two similar commercial properties can be offered very different interest rates, and why comparing the market matters. Commercial mortgages here also differ from buy-to-let mortgages, which are assessed on rental cover rather than on a trading healthcare business, so the lending criteria and the rates are not directly comparable.

Lenders apply their own criteria to a refinance: the property type, condition and value, the loan-to-value, the trading accounts, your experience, and how the existing borrowing has been managed. Some lenders will want a personal guarantee from the directors or partners alongside the security over the property, and the strength of that guarantee can influence the rate. For an urgent refinance, for example an expiring facility with a hard deadline, bridging loans can hold the position while a longer-term commercial mortgage is put in place. Our expert team reads these criteria across the market so we can match your refinance to the lenders most likely to support it.

Commercial mortgages for healthcare property come in fixed and variable forms, and the choice shapes how exposed your business is to interest rate movements. A fixed commercial mortgage holds the interest rate for an agreed period, giving the business certainty on its repayments, while a variable mortgage moves with the reference rate, so the rate, and your monthly cost, can rise or fall. Most lenders offer both, and the right answer depends on how long you expect to hold the commercial property and your appetite for changes in rates. Beyond the headline interest rate, the lending package also covers the term, the fees and any early-repayment charges, and we weigh all of these commercial mortgage terms together rather than chasing the lowest advertised rate. Healthcare lending of this kind is business borrowing secured on commercial property, so the loans, the rates and the criteria sit outside the residential mortgage world entirely.

Loan-to-value and what lenders look for

A refinance is sized against the current value of the commercial property and the income behind it, so the valuation and the loan-to-value are central. Lenders assess the property type, condition, location and value, and the strength and durability of the business income, giving most weight to contract-backed income such as NHS premises reimbursement or a stable dispensing or UDA contract. They also look at the trading accounts, your track record and how the existing lending has been managed.

A well-maintained commercial property, clean business accounts, durable income and a clear reason for the refinance all strengthen a case. Where income is contract backed, lenders are often willing to support a higher loan-to-value, which matters when you are releasing equity or raising investment capital. Lenders offering commercial mortgages on healthcare property weigh the building, the business and the income together, and the interest rates they quote reflect all three. We will tell you honestly where your case is strong and approach the lenders whose commercial mortgages and lending criteria best fit your asset.

Indicative terms

Terms vary by lender, by the asset and by the strength of the business income, so these are indicative ranges rather than an offer. A healthcare property refinance is usually arranged as a commercial mortgage running over fifteen to twenty-five years, with loan-to-value support driven by the current valuation and the durability of the income. Commercial mortgage rates may be fixed or variable and are usually priced over a reference rate, and the right choice between fixed and variable depends on your plans and your appetite for interest rate movement. Because commercial mortgages are priced to the deal, the interest rates on offer move with the loan-to-value and the strength of the business, so we weigh rate, term, fees and flexibility together rather than chase the headline number.

We will give you a realistic, indicative view once we understand the building, the income and your reason for refinancing. All terms are indicative and subject to status, valuation and full lender approval. Commercial finance of this kind is not regulated by the Financial Conduct Authority, and nothing here is financial advice.

How we arrange it

We start with the building, the income, the existing facility and what you want the refinance to achieve, whether that is releasing equity, moving off an expiring facility or improving your terms. We then review the market and come back with indicative terms from the lenders most likely to support your asset. Once you choose a route, we package the case, manage the valuation and the lender, work with your solicitor and other professional advisers, and keep the refinancing moving to formal offer and drawdown. You deal with us throughout, with one professional point of contact from first enquiry to completion.