--- title: "Warehouse Mortgage" description: "Warehouse mortgages explained: up to 75% LTV, DSCR and EBITDAR assessment, MV1 yield-based, vacant possession and 90-day valuations, and what lenders require." url: "https://mortgagelane.com/insights/warehouse-mortgages" site: "Mortgage Lane" collection: "posts" date: "2026-04-13" author: "Seren Norton" category: "Guides" reviewed: "2026-09-11" reading_time: "12 min" byline: "Seren Norton" author_credentials: "CeMAP · FCA authorised firm" language: "en-GB" robots: "index,follow" --- # Warehouse Mortgage Warehouse mortgages explained: up to 75% LTV, DSCR and EBITDAR assessment, MV1 yield-based, vacant possession and 90-day valuations, and what lenders require. We assist commercial clients with mortgage options for warehouses, offering borrowing to investment owners and business owners. [Warehouse mortgage](https://mortgagelane.com/definitions?term=warehouse-mortgage) Commercial A commercial mortgage used to purchase or refinance warehouse or industrial premises. [Read the full definition of Warehouse mortgage](https://mortgagelane.com/definitions?term=warehouse-mortgage) ## Warehouse Mortgage Specilaists Speak to a Mortgage Lane adviser about your options. ## In short There are two primary categories of borrowers for a warehouse mortgage: **A warehouse mortgage is commercial finance used to buy or refinance a warehouse, industrial unit, storage facility, or distribution centre.** Lenders assess a warehouse mortgage in one of two ways depending on who is buying: on the trading strength of the business occupying the property, or on the rental income the property produces. That single distinction determines the valuation method, the affordability test, and the lenders that can consider the case. Getting it right at the outset is what avoids a decline or a repriced offer later. Mortgage Lane arranges warehouse mortgages for business owners and investors, including cases valued on investment yield or wider commercial assessment. We also place more complex scenarios, including applicants with no accounts, no residential property ownership, or impaired credit, by matching the case to lenders whose criteria fit the borrower and the asset. ## Who can get a warehouse mortgage? **There are two categories of warehouse mortgage borrower, and lenders assess each differently.** **Owner-occupiers** are business owners using the warehouse for their own operations, typically to store goods, materials, or products for distribution. An owner-occupier requires a [commercial mortgage](https://mortgagelane.com/mortgages/commercial-mortgages). Underwriters base their lending assessment on the occupying business, so affordability is calculated as a multiple of net profit in the latest years' accounts of the operating business. **Investors** buy the warehouse to lease to third-party tenants and generate rental income. Lenders assessing an investor case focus on the investment's returns, requiring details of the lease agreements, the rental yield, and the tenant's financial health. Lenders assess these two borrower types differently, factoring in the purpose of the property, the financial documentation available, and market risk. ## Warehouse mortgages for owner-occupiers **Where a business is buying its own warehouse, the lender underwrites the business rather than the property.** Four things drive the outcome. - **Company financials.** You will usually need company accounts covering the past 2 to 3 years, evidencing profitability and the ability to service the mortgage. - **EBITDA and EBITDAR.** Lenders measure financial health using Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA), or in some cases Earnings Before Interest, Taxes, Depreciation, Amortisation and Rent (EBITDAR). These metrics establish whether the business generates enough income to cover the mortgage payments. - **Debt Service Coverage Ratio (DSCR).** Most lenders require a minimum Debt Service Coverage Ratio of 1.25x, meaning the business should generate at least 1.25 times the mortgage payment. A DSCR of 1.25x gives the lender headroom for the company to cover both the mortgage and its operational costs. - **Loan to Value (LTV).** Lenders typically offer up to 75% of the property value on a warehouse mortgage, requiring a 25% deposit. The maximum LTV varies with the strength of the business and the location of the property. ## Warehouse mortgages for investors **Where a warehouse is bought as an investment, the lender underwrites the lease and the tenant rather than the borrower's trading business.** Four things drive the outcome. - **Lease agreements.** Investors must provide strong lease agreements setting out the rental terms, tenant profile, and rent. A longer lease term is treated more favourably because it secures the income stream, and lenders prefer leases without break clauses. - **Tenant covenant strength.** The financial health of the tenant occupying the warehouse is a key factor. A well-established tenant reduces default risk, which improves the terms available. - **Rental income.** Lenders assess whether the rental income covers the mortgage payments, typically requiring a Debt Service Coverage Ratio of at least 1.25x. A DSCR of 1.25x means the rental income must be at least 25% higher than the mortgage cost. - **EBITDAR multiples.** Lenders sometimes apply a multiple to the property's EBITDAR to calculate borrowing capacity. For warehouse mortgages, that multiple generally ranges from 5x to 8x, depending on the market, the location, and the tenant profile. ## Warehouse valuation methods explained **The valuation method a lender applies has a larger effect on the loan available than the headline rate does.** Which method applies depends on the borrower's experience, the strength of the lease, and the financial history available. **MV1 (Market Value 1).** An MV1 valuation is yield-based, calculating the property's value from the rental income it generates. MV1 is typically used where the warehouse is leased out on strong, long-term leases with solid covenants and established tenants, because the lender is assessing how the warehouse performs as an investment asset. **Bricks and mortar vacant possession (VP).** A vacant possession valuation assumes the warehouse is empty and ready for immediate occupation. A VP valuation disregards existing leases and rental income entirely and establishes what the property would fetch on the open market without a tenant. Lenders use vacant possession to confirm the asset retains value if the tenant leaves. **Bricks and mortar 90-day value.** A 90-day valuation is the price the property is expected to achieve in a sale completed within 90 days. The 90-day basis focuses on the physical structure and land rather than the income, and is used where the borrower has limited experience, weak lease covenants, or incomplete accounts. **In short:** a bricks and mortar valuation focuses on the physical property and is applied where risk is higher or financial history is incomplete. An MV1 valuation is yield-based and is applied to income-generating properties with strong leases. ## Other factors affecting warehouse mortgage terms **Loan to Value.** Lenders typically offer up to 75% of the property value on a warehouse mortgage. For certain asset types or newer businesses, the maximum LTV may be lower. **Interest rates.** Commercial mortgage interest rates are generally higher than residential mortgage rates, reflecting the higher perceived risk. The rate on a warehouse mortgage depends on the loan amount, the borrower's creditworthiness, and market conditions. Investors usually face higher rates than owner-occupiers. ## Preparing for a warehouse mortgage application 1. **Have your financials ready.** Gather company accounts, tax returns, and a business plan before you approach a lender. 2. **Use a commercial broker.** Rates and terms vary widely between commercial lenders, and the warehouse market is not served by high street products. 3. **Consider your long-term needs.** Whether you are an investor or an owner-occupier, check the warehouse meets your long-term business or investment goals. Investors should choose a location attractive to tenants with potential for appreciation. 4. **Factor in all costs.** Beyond the mortgage, budget for the deposit, solicitor fees, surveys, and stamp duty. ## Key Features *Key Features (warehouse mortgages)* | Feature | Detail | | --- | --- | | Loan to Value | Up to 75% | | Mortgage Term | Up to 40 years | | Repayment Options | Capital repayment, interest only | | Valuation Options | Yield based (going concern), vacant possession (VP), bricks and mortar 180-90 day | | Experience | Not required | | Product Access | Whole of Market | ## Preparing for Your Warehouse Mortgage Application 01 ### Have Your Financials Ready Gather all the necessary documents, including company accounts, tax returns, and a business plan. 02 ### Work with a Broker Navigating the commercial mortgage market can be complex, and rates and terms vary widely between lenders. Working with an experienced commercial mortgage broker such as us at Mortgage Lane can help you identify the best mortgage product for your situation. 03 ### Consider Your Long-Term Needs Whether you’re an investor or an owner-occupier, ensure that the warehouse meets your long-term business or investment goals. If you’re an investor, choose a location that’s attractive to tenants and has potential for appreciation. 04 ### Factor in All Costs Beyond the mortgage, you’ll need to budget for upfront costs such as deposits, solicitor fees, surveys, and potentially even stamp duty. Make sure these are all accounted for before proceeding with your purchase. ## Commercial mortgage calculator Choose owner occupier for a business buying or refinancing its own warehouse, assessed on adjusted net profit before tax, or investment for a warehouse let to tenants, assessed on lease income. Explore your borrowing Start again Enter your figures in pounds. Your estimate updates as you go. Indicative maximum loan \- Enter your figures to see an estimate. Loan to value [Discuss your options](https://mortgagelane.com/contact) Indicative estimate only, subject to lender criteria and valuation. This is not a mortgage offer. Your property may be repossessed if you do not keep up repayments. ## Warehouse Mortgage: frequently asked questions **What is a warehouse mortgage?** A warehouse mortgage is a type of commercial financing used to purchase or refinance warehouse properties. These loans are tailored to industrial spaces, storage units, or distribution centres and are based on the property’s value, lease agreements, and income potential. **What is the Loan-to-Value (LTV) ratio for warehouse mortgages?** The LTV for warehouse mortgages typically ranges from 60% to 75%. This means the borrower needs a deposit of 25%-40% of the property’s value, though this can vary based on the property’s risk profile and the borrower’s financial standing. **What is the difference between Bricks and Mortar and MV1 valuations?** **Bricks and Mortar** focuses on the physical property’s value, often for quick sales or riskier cases. **MV1** uses rental income to assess the property’s value, ideal for properties with strong lease agreements and stable tenants. **Can I get a warehouse mortgage if I’m an inexperienced buyer?** Yes, but lenders may impose stricter terms, such as a lower LTV. Bricks and Mortar valuations may also be used for inexperienced applicants due to the higher perceived risk. **What is a Vacant Possession (VP) valuation?** A **VP valuation** assumes the warehouse is unoccupied and doesn’t account for rental income. This conservative valuation focuses purely on the building’s physical value if it were sold without tenants. **What kind of properties qualify for a warehouse mortgage?** Warehouses used for storage, logistics, distribution centres, or manufacturing qualify. The property can either be an investment (leased out) or owner-occupied by a business. **What is an exit strategy in a warehouse mortgage?** An exit strategy is how the borrower plans to repay the mortgage, either by selling the property, refinancing with a longer-term loan, or generating income through lease agreements. **How does the strength of the lease covenant affect the loan terms?** A strong lease covenant with long-term, financially stable tenants may result in better loan terms, such as higher valuations and loan size. A weak covenant could have the opposite effect. **What documents do I need for a warehouse mortgage application?** Typically, you’ll need property details, lease agreements (if applicable), company accounts (for owner-occupiers), a business plan, and proof of income. The exact documentation depends on whether you’re an investor or owner-occupier. **What is different about warehouse mortgages?** Warehouse properties are in high demand, especially with the expansion of e-commerce and online retail. [Read more about What is different about warehouse mortgages?](https://mortgagelane.com/guides/warehouse-mortgages/what-is-different-about-warehouse-mortgages)[Get in touch about What is different about warehouse mortgages?](https://mortgagelane.com/contact) [Warehouse mortgage](https://mortgagelane.com/definitions#def-warehouse-mortgage) **Who can apply for a warehouse mortgage?** Both investors and owner-occupiers can apply for warehouse mortgages. Investors lease out the property, while owner-occupiers use the warehouse for their business operations. **What types of valuations are used for warehouse mortgages?** The most common valuations are **Bricks and Mortar (90-Day Value)**, **Bricks and Mortar Vacant Possession (VP)**, **MV1 (yield-based valuations)**, and **accounts-based valuations** for operating businesses. These vary based on the borrower’s experience, lease agreements, and financials. **How does a weak lease covenant affect a warehouse mortgage?** A weak lease covenant indicates higher risk, which could lower the loan amount or require a more conservative valuation like the **Bricks and Mortar 90-Day Value** to safeguard the lender. **How does a warehouse mortgage differ from a standard commercial mortgage?** Warehouse mortgages often involve larger spaces with more complex uses, such as distribution and storage. The valuation methods and loan structures may differ, focusing on the industrial nature and income generation of the property. **Can I get a warehouse mortgage without full financial accounts?** Yes, though it may be more challenging. In such cases, lenders may rely on Bricks and Mortar valuations and require higher deposits or offer lower loan amounts to mitigate their risk. **What interest rates can I expect for a warehouse mortgage?** Interest rates for warehouse mortgages vary based on market conditions, the borrower’s creditworthiness, lease strength, and the loan’s LTV. Generally, around 6%. **What is a yield-based valuation for a warehouse mortgage?** A yield-based valuation (MV1) assesses the property’s value based on the rental income it generates. This is typically used for leased warehouses with strong tenants, offering insight into the long-term returns of the property. **Can I get a warehouse mortgage if the property is vacant?** Yes, but lenders may use a **Vacant Possession valuation**, and you’ll likely need a higher deposit and a way to demonstrate affordability. The loan terms may be stricter compared to a property with tenants. **What is a 90-day valuation?** A **90-day valuation** estimates the property’s sale price if it were sold within a 90-day period. It’s a conservative valuation method, often used when the borrower has less experience or financial uncertainty. **Why should I use Mortgage Lane for a warehouse mortgage?** At **Mortgage Lane**, we specialise in warehouse mortgages and understand the complexities of industrial properties. We work with lenders to find tailored solutions, whether you’re a first-time buyer or a seasoned investor, and guide you through the best valuation and financing options to secure the most favourable terms. ## Related mortgage insights and guides - [2026](https://mortgagelane.com/guides/commercial-mortgage-guide/warehouse-mortgages)Guide[Warehouse mortgages](https://mortgagelane.com/guides/commercial-mortgage-guide/warehouse-mortgages)Warehouse mortgages are a form of commercial finance used to purchase, refinance, or raise capital against warehouse and logistics property, including distribution centres, storage facilities, and fulfilment hubs. Warehouses sit within the wider industrial sector and are generally viewed by lenders as low-to-moderate risk assets, supported by strong occupier demand and broad alternative-use potential.[Read more about Warehouse mortgages](https://mortgagelane.com/guides/commercial-mortgage-guide/warehouse-mortgages) - [2026](https://mortgagelane.com/guides/commercial-mortgages/commercial-warehouse-mortgage)Guide[Commercial warehouse mortgage](https://mortgagelane.com/guides/commercial-mortgages/commercial-warehouse-mortgage)Warehouse lending remains one of the strongest areas of commercial finance, but criteria varies widely between lenders. Our role is to identify the most appropriate lender and structure, ensuring the mortgage aligns with both the asset and long-term strategy.[Read more about Commercial warehouse mortgage](https://mortgagelane.com/guides/commercial-mortgages/commercial-warehouse-mortgage) - [2026](https://mortgagelane.com/guides/warehouse-mortgages/what-is-different-about-warehouse-mortgages)Guide[What is different about warehouse mortgages?](https://mortgagelane.com/guides/warehouse-mortgages/what-is-different-about-warehouse-mortgages)Warehouse properties are in high demand, especially with the expansion of e-commerce and online retail.[Read more about What is different about warehouse mortgages?](https://mortgagelane.com/guides/warehouse-mortgages/what-is-different-about-warehouse-mortgages) ## Common questions **Q: What is the Loan to Value (LTV) for a warehouse mortgage?** faq-id: what-is-the-loan-to-value-ltv-for-a-warehouse-mortgage Loan to Value on a warehouse mortgage typically ranges from 60% to 75%, requiring a deposit of 25% to 40% of the property value. The LTV available depends on the property's risk profile and the borrower's financial standing. **Q: Can I get a warehouse mortgage as an inexperienced buyer?** faq-id: can-i-get-a-warehouse-mortgage-as-an-inexperienced-buyer Yes. Lenders may apply stricter terms such as a lower Loan to Value, and may use a bricks and mortar valuation rather than a yield-based one, reflecting the higher perceived risk. **Q: What types of valuation are used for warehouse mortgages?** faq-id: what-types-of-valuation-are-used-for-warehouse-mortgages The valuations used are bricks and mortar 90-day value, bricks and mortar vacant possession, MV1 yield-based valuation, and accounts-based valuation for operating businesses. Which applies depends on the borrower's experience, the lease agreements, and the financial evidence available. **Q: What is an exit strategy on a warehouse mortgage?** faq-id: what-is-an-exit-strategy-on-a-warehouse-mortgage An exit strategy is how the borrower plans to repay the mortgage, whether by selling the property, refinancing onto a longer-term facility, or servicing the debt from lease income. ## Talk it through with an adviser Let’s talk property finance ## Contact us **Call our team:** [+44 333 231 8206](tel:+443332318206) **Email us:** [enquiries@mortgagelane.com](mailto:enquiries@mortgagelane.com) **Opening hours:** Monday to Friday, 9am–6pm Closed Saturday and Sunday Your enquiry goes to our team, who will get in touch to discuss your next steps. Fields marked are required. First name Last name Email Phone What can we help with? 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