Commercial mortgages for healthcare premises
The short version
- An owner-occupier commercial mortgage funds a property your own practice or business trades from, so the loan is repaid out of trading profit rather than tenant rent.
- Most healthcare buyers should plan for a deposit of roughly 20 to 40 per cent of value, with the strongest cases supported by a reliable income such as NHS notional rent or a long contract.
- Lenders price a margin over a reference rate and test affordability with a debt service cover ratio (DSCR), not just loan to value.
- We are an arranger and introducer, not a lender. We compare lenders, package the case and put it to the desks most likely to back it.
- Most commercial lending is unregulated, but where a loan is secured on your home or otherwise sits inside the FCA perimeter we refer that part to an authorised firm.
If you run a surgery, a dental practice, a pharmacy or a care home and you want to own the building you trade from, the route is an owner-occupier commercial mortgage. It is a loan secured on the premises, repaid from the profits of the business that occupies them, rather than from rent paid by a third-party tenant.
This guide is the hub for everything we cover on healthcare commercial mortgages. It explains the owner-occupier basis, the deposit you are likely to need, how rates are built, and what a lender actually looks at before it agrees a loan. Each section links out to a fuller article where there is more to say.
Throughout, we write as brokers. We arrange and introduce finance; we do not lend. Our job is to translate a healthcare business into a case a lender will say yes to, and to find the desk most comfortable with your sector.
In this guide
What an owner-occupier commercial mortgage is
An owner-occupier commercial mortgage funds a property that your own trading business will use. A GP partnership buying its surgery, a dentist buying the freehold of the practice they already run, a pharmacist buying the shop, a care operator buying the home: all of these are owner-occupier cases. The defining feature is that the income that repays the loan comes from the business, not from a tenant.
That matters because it changes how a lender underwrites. It looks at the accounts of the practice, the strength of its income, and whether trading profit comfortably covers the mortgage payments. The building is the security, but the business is what is being lent against.
Owning the building turns rent, a cost that never comes back, into a mortgage that builds an asset the partnership controls.
We explain the distinction in full, including how a lender decides whether you count as an owner-occupier, in what is an owner-occupier commercial mortgage.
Owner-occupier versus investment
The other side of the coin is an investment mortgage, where you buy a property to let to a tenant and the rent repays the loan. The two are underwritten differently and priced differently.
| Owner-occupier | Investment | |
|---|---|---|
| Who occupies | Your own business | A third-party tenant |
| What repays the loan | Trading profit | Rent received |
| Main affordability test | Profit against payments (DSCR) | Rent against payments (often 125 per cent or more) |
| Typical deposit | Around 20 to 40 per cent | Often 25 to 45 per cent |
| Regulation | Usually unregulated business lending | Usually unregulated, buy to let style |
A surgery partnership occasionally has a foot in both camps, for example where one partner owns the building and the partnership pays rent. Those structures need care, and we work through them case by case.
The deposit
Deposit is the single number most buyers ask about first. For healthcare owner-occupier cases the realistic planning range is roughly 20 to 40 per cent of the purchase price or value, with the lower end reserved for strong, well-evidenced cases and the higher end where income is less certain or the building is specialist.
A reliable income stream changes the picture. A GP surgery receiving NHS notional rent, or a pharmacy with a long NHS contract, gives a lender comfort that supports a smaller deposit. We set out the detail, including how to fund the gap, in how much deposit you need for a commercial mortgage. You can size a loan against a deposit with our loan to value calculator.
How rates are built
Healthcare buyers often expect a single advertised rate. Commercial mortgages do not work that way. A lender quotes a margin, its profit and its view of your risk, and adds it to a reference rate such as the Bank of England base rate or a swap rate. The rate you pay is the two added together, and it can be fixed for a period or left to vary.
We never quote a live rate on this site because the rate that applies to you depends on your numbers on the day. We explain the mechanics, and what moves a margin up or down, in commercial mortgage rates explained.
What lenders assess
Before a lender agrees a loan it looks past the building at the business behind it. The headline tests are loan to value (how much you are borrowing against the value), debt service cover (whether profit covers the payments with room to spare), and the quality and durability of the income.
The income
Accounts, and for healthcare the contracts behind them, for example NHS notional rent, an NHS pharmacy contract or private fee income.
The covenant
Who stands behind the loan, the partners or company, and their experience in the sector.
The property
Value, condition, and how easily it could be sold or relet if the business stopped. Specialist buildings are harder to resell and lenders price for that.
The structure
Loan to value, term, repayment basis and whether any extra security is needed.
Affordability is measured with DSCR. You can test a case against a target cover ratio with our DSCR affordability calculator. For the underwriting detail, see how to read how difficult it is to get a commercial mortgage and our guide on how lenders assess healthcare covenants.
Term, repayment and amortisation
Term is how long the mortgage runs, often 15 to 25 years for owner-occupier healthcare cases. Most loans are on a repayment, or amortising, basis, which means each monthly payment covers interest and chips away at the capital, so the balance falls to zero by the end of the term. Interest-only loans, where you pay only interest and repay the capital at the end, are rarer and need a clear exit.
Where we fit, and the regulation point
We are an arranger and introducer, not a lender. We package your case, present it to the lenders most likely to back a healthcare business, and manage the process to completion. We work alongside the wider healthcare property finance options, from GP surgery finance to clinic finance and refinancing.
On regulation: most commercial mortgages for a trading business are unregulated. But if a loan is secured on your own home, or otherwise falls inside the FCA perimeter, that part is regulated and we refer it to an authorised firm rather than arranging it ourselves. We will always tell you which side of the line a structure sits on before you commit.
The full route from enquiry to drawdown is set out in our guide to the commercial mortgage process for healthcare premises.