Mortgage guide
Industrial mortgages
Understanding this distinction is critical, as affordability is stress-tested in very different ways.
- Published
- 4 Aug 2026
- Last reviewed
- 4 Aug 2026
- Reading time
- 3 min
Industrial mortgages
We assist borrowers with industrial commercial mortgages by structuring applications in line with how lenders actually assess affordability, pricing, and risk. For industrial assets such as warehouses, factories, and distribution centres, lenders place significant emphasis on EBITDA or rental income, depending on whether the property is owner-occupied or held as an investment.
Understanding this distinction is critical, as affordability is stress-tested in very different ways.
Owner-Occupied Industrial Mortgages
For owner-occupied industrial property, affordability is assessed on the trading performance of the business operating from the premises. Lenders use EBITDA to calculate a Debt Service Coverage Ratio (DSCR).
Most lenders require:
- EBITDA to cover annual mortgage repayments by approximately 1.25× to 2.0×
- Repayments to be stress-tested above the pay rate
If this level of coverage is not achieved, the loan amount is reduced regardless of property value. Strong, consistent EBITDA supports higher borrowing capacity, longer terms, and more competitive pricing.
Investment Industrial Mortgages
For industrial investment property, lenders assess affordability based on rental income, not business EBITDA. Instead of DSCR multiples, lenders apply interest-rate stress testing to the rent.
Typical lender stress models include:
- Pay rate +2% for 2-year fixed-rate products
- Pay rate only for 5-year fixed-rate products
Rental income must comfortably cover the stressed interest cost. Short leases, weaker covenants, or specialist occupiers may result in tighter stress assumptions or reduced loan-to-value limits.
How EBITDA, Rent, and Structure Affect Lending
While EBITDA or rent does not directly dictate loan-to-value, strong and sustainable income:
- Improves lender confidence
- Supports leverage of up to 75% LTV where criteria allow
- Unlocks sharper commercial mortgage rates
In owner-occupied cases this is driven by EBITDA strength; in investment cases, by lease length, tenant quality, and income security.
How We Help
As a whole-of-market commercial mortgage broker, we assist industrial borrowers by:
- Identifying whether owner-occupied or investment lending is most appropriate
- Structuring affordability to meet lender stress tests
- Managing EBITDA or rental presentation to avoid over-conservative outcomes
- Matching each case to lenders with genuine industrial appetite
Correctly aligning EBITDA-led DSCR tests for owner-occupiers and rent-based stress testing for investors is essential to securing sustainable industrial finance on the best available terms.
Commercial mortgage calculator
Choose owner occupier for a business buying or refinancing premises it trades from, assessed on adjusted net profit before tax from the latest accounts, or investment for property let to tenants, assessed on lease income.
Commercial mortgage criteria
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Criteria | Detail |
|---|---|
| Max Loan to Value (LTV) | 80% LTV Care Home Mortgages, 100% LTV Medical Commercial Mortgages, 75% Commercial Investment |
| Max Term | Up to 40 years |
| Completions | From 4 weeks |
| Repayment options | Capital repayment and Interest only |
| Commercial mortgage rates | From 6.19% |
| Rate options | Variable, Base Rate Tracker, 2, 3 or 5 year fixed mortgage options |
| Valuation methods | Going concern/Investment (Market value 1, MV1), MV2, MV3 or bricks and mortar |
| Flexible Leases | Rolling leases, weak covenants and short time remaining accepted |
| Adverse credit | Accepted on some products on a case by case basis |
| Locations | Available in England, Scotland, Wales and Northern Ireland |
| Experience | Not required on certain products |
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Feature | Detail |
|---|---|
| Max Loan to Value (LTV) | 65% |
| Product fee | 5% (4.74% for existing customers) |
| Fixed rate (5 years) | 6.34% |
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Frequently asked questions
Can you get a 90% commercial mortgage?
Yes, 90% loan-to-value commercial mortgages are possible, but only in limited sectors such as healthcare properties, pharmacies, or certain convenience stores with strong trading history. For most other commercial properties, maximum lending is typically capped at around 70% to 75% LTV.
What documents do I need to apply for a mortgage with Mortgage Lane?
You will usually need proof of identity, proof of income, bank statements and details of the property you are buying or investing in. The exact requirements depend on the mortgage product and your circumstances.
How long does it take to obtain a mortgage offer?
It depends on the lender, and each mortgage case is different. Digital mortgages can produce an offer quickly where the lender's automated checks are satisfied, while traditional lenders usually take longer. Cases that need more underwriting can take longer.
Do mortgage brokers charge fees?
Some mortgage brokers charge fees, while others do not charge the borrower directly. A broker may be paid by the customer, by the lender through a procuration fee, or by both. UK mortgage brokers must clearly disclose their fees and payment arrangements before the borrower proceeds.
Talk it through with an adviser
Speak to a Mortgage Lane adviser about your circumstances and the next steps.
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- Call our team
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