Current Commercial Mortgage Rates: What to Expect in 2026
Published on 3 March 2026
Understanding Rate Formation
Commercial mortgage rates reflect three components: the Bank of England base rate, the lender's margin, and your credit risk premium. The base rate forms the foundation. From there, lenders add margin based on loan-to-value, credit history, property type, and market conditions.
Fixed rates lock your interest rate for a set period, typically 2, 3, 5, or 10 years. Variable rates move with the base rate. Tracker rates follow the base rate plus a fixed margin. Discounted rates offer reductions from standard variable rates.
March 2026 Market Snapshot
Current commercial mortgage rates range from 4.5% to 7.5%, depending on your circumstances. Mainstream lenders offer rates at the lower end. Specialist and second-charge lenders charge higher rates to compensate for additional risk.
Five-year fixed rates remain the most popular choice. They provide planning certainty over medium-term horizons whilst remaining flexible for business growth.
Rate Impact on Monthly Costs
| Property Value | Loan (75% LTV) | 4.5% Rate | 5.5% Rate |
|---|---|---|---|
| £400,000 | £300,000 | £1,607/mo | £1,724/mo |
| £600,000 | £450,000 | £2,410/mo | £2,587/mo |
| £1,000,000 | £750,000 | £4,017/mo | £4,311/mo |
One percentage point difference equals £107 monthly on a £300,000 mortgage over 20 years. Over the mortgage term, that single point costs an additional £25,680.