Specialist Commercial Mortgage Broker

Hotel Mortgage UK Commercial Mortgages for Hotels and Hospitality Businesses

Whether you are purchasing your first hotel, expanding an existing hospitality business, or refinancing a hotel you already own, securing the right hotel mortgage requires specialist knowledge of the hospitality sector. Our mortgage experts access a panel of specialist commercial lenders to find the best hotel mortgage rates tailored to your business.

From 6.75%

Interest rate

Up to 70%

Loan-to-value

5-25 years

Mortgage term

£150,000

Minimum loan

Can You Get a Commercial Mortgage for a Hotel?

Yes, commercial hotel mortgages are specialist commercial mortgage products designed for hotel properties across the UK. Whether you are buying a hotel for the first time, purchasing your first hotel as an investment, or refinancing an existing hotel, our hotel mortgage broker team can help you get a commercial mortgage on competitive terms.

How Hotel Lending Differs

A mortgage for a hotel works differently from a standard mortgage because lenders assess the hospitality business performance alongside the property value. Factors like occupancy rates, revenue per available room, seasonality, and the operator's track record all influence the mortgage rates and terms available. Our broker team accesses specialist commercial lenders who understand the hospitality sector and can tailor finance options to your specific situation.

A Diverse Hotel Market

The UK hotel market offers diverse investment opportunities, from small bed and breakfast operations to large city-centre conference venues. Each type of hotel attracts different lending criteria and different lenders. Boutique hotels in popular tourist destinations, budget hotel chains, and serviced apartment operations all require tailored hotel finance solutions. Our hotel mortgage broker service covers the full spectrum of hotel types and sizes, with access to specialist lenders who understand the operational complexities of the hospitality sector.

Hotel Mortgage Rates and Lending Criteria

Hotel mortgage rates typically range from 6.75% to 10.00%, depending on the lender, LTV, type of hotel, and borrower profile. A boutique hotel in a prime location with strong trading history will access the best rates, while a small hotel or seasonal property may face higher interest rates. Interest rate structures include fixed, variable, and hybrid options.

ScenarioTypical rate (pa)Max LTVTerm
Purchase (established hotel, experienced operator)6.75% to 7.75%70%5 to 25 years
Purchase (first-time operator)7.50% to 9.00%60%5 to 20 years
Boutique or prime location, strong RevPAR6.75% to 7.50%70%5 to 25 years
Seasonal or secondary location8.00% to 10.00%55%5 to 20 years
Refinance or equity release7.00% to 8.50%65%5 to 25 years

What Lenders Weigh

Hotel mortgage lenders assess applications based on the value of the hotel (or value of the property), projected revenue per available room (RevPAR), occupancy rates, the number of rooms in a hotel, and the operator's experience. Lenders offer up to 65-70% LTV on established hotels, with a commercial mortgage deposit of at least 30% typically required. Lenders may require sight of at least 2-3 years' trading accounts.

Most hotel lenders cap at 65% to 70% LTV and want at least 30% deposit, because they lend against trading performance and not just the bricks. If your accounts show two to three years of rising RevPAR, ask us to test the higher end of that range before you assume 30%.

For new hotel developments or major refurbishments, development finance may be more appropriate than a standard commercial mortgage for a hotel. Use our mortgage calculator to estimate costs, or speak to our mortgage experts for a personalised quote. The best hotel mortgage terms come from comparing across our panel of 100+ lenders.

How Hotels Are Valued

Hotel valuations are more complex than standard commercial property assessments. Specialist hotel valuers use trading performance data, including average daily rate (ADR), occupancy rates, and revenue per available room (RevPAR), alongside property-specific factors like location, room count, facilities, and condition. A hotel with strong trading history and an established brand or reputation will command a higher valuation than a similar property with weak or inconsistent performance. This valuation methodology means that investing in improvements to the hotel business, not just the property, can increase your borrowing capacity when you come to refinance.

Hotel Purchase Finance: How to Buy a Hotel

A hotel purchase requires careful planning and the right business finance structure. To get a hotel mortgage or mortgage to buy a hotel, you will need a comprehensive business plan showing projected revenue, operating costs, staffing requirements, and your strategy for the hotel business. Hotel owners and aspiring operators should prepare detailed financials to support their mortgage application.

What You Will Need

  • Business plan: revenue, operating cost, and staffing projections.
  • Trading accounts: two to three years for an existing hotel.
  • Trading metrics: occupancy, ADR, and RevPAR figures.
  • Hospitality experience: your operating background or CV.
  • Proof of deposit: evidence of your 30% or more contribution.
  • Bank statements: recent business banking history.
  • Existing borrowing: details of any other hotels or loans.

The Acquisition Timeline

The process to purchase a hotel typically takes 8-16 weeks from initial enquiry to completion. Our broker team manages the entire process, from sourcing hotel finance and submitting your application to liaising with solicitors and managing the mortgage approval timeline. For business owners with strong personal and business credit, we can often achieve mortgage approval within days of submission.

If you are buying a hotel at auction, speed is critical. A bridging loan can complete in 7-14 days, giving you time to arrange longer-term hotel finance. We offer comprehensive solutions for hotel acquisitions of all sizes, from small hotel purchases to large UK hotel portfolio deals.

Support for First-Time Buyers

First-time hotel purchasers face particular challenges in securing hotel finance, but our broker team has extensive experience in supporting new entrants to the hotel industry. Key factors that strengthen a first-time hotel mortgage application include: relevant hospitality experience (even if not as an owner), a comprehensive business plan with realistic revenue projections, support from established hotel management companies, and a willingness to commit a larger deposit. We work with several lenders who actively welcome new hotel operators when the application is properly structured and supported by credible operational plans.

The UK hotel market offers particular opportunities in regional locations where tourism and business travel are growing. Seaside towns, national park gateways, and university cities all present different hotel investment profiles. Understanding which UK hotel markets are growing, and which lenders have appetite for each market segment, is a key advantage of working with our specialist broker team. We analyse local market data including occupancy trends, rate growth, and competitive supply to support every hotel mortgage application with credible market intelligence.

Refinancing and Expanding Your Hotel Portfolio

Many hotel owners choose to refinance their existing hotel mortgage to secure a hotel mortgage at better rates, release equity for refurbishment, or fund hotel acquisitions. The refinancing process involves a fresh valuation of your existing properties and an updated assessment of your hospitality business performance.

A hotel valuation follows the trading, not the postcode. Lift occupancy and RevPAR for a couple of years and the same building can support materially more borrowing at your next refinance, because the valuer prices the income the rooms actually earn.

Funding Refurbishment

If you want to refurbish a hotel to increase room count or upgrade facilities, a business loan or development finance product can fund the works alongside your main hotel mortgage. Using hotel revenue projections, lenders can assess the potential uplift in value and structure mortgage structures accordingly.

The hospitality industry has seen significant growth in the hospitality sector in recent years, making hotel properties an attractive loan proposition for lenders. Our team of hotel finance specialists, experts in hotel mortgage arrangements, will help you navigate the options and finance hotel projects of any scale.

Scaling a Portfolio

Portfolio hotel investors can access specialist lending arrangements that offer efficiencies across multiple properties. Cross-security arrangements, portfolio-level pricing, and revolving credit facilities are available for operators with two or more hotel properties. These structures can reduce the overall cost of borrowing and simplify the management of multiple hotel mortgages. Whether you are expanding through acquisition or building new hotel properties through development finance, our team structures multi-property hotel finance packages that optimise your overall borrowing position.

For hotel owners looking to undertake major refurbishment, such as adding bedrooms, upgrading conference facilities, or repositioning the hotel brand, our team arranges structured finance packages that cover both the acquisition and improvement costs. The key is presenting lenders with a clear picture of the projected value uplift that the refurbishment will deliver. Our team prepares detailed refurbishment business cases that quantify the expected increase in RevPAR, occupancy, and overall profitability, supporting larger lending commitments at competitive rates.

Why Choose a Specialist Hotel Mortgage Broker?

The hotel industry is unique, and a standard residential mortgage broker or generic commercial property advisor may not have the expertise to secure a hotel mortgage on the best terms. Our hotel mortgage broker service brings specialist knowledge of mortgages for hotels, commercial mortgages for hotels, and the wider hospitality lending landscape.

We compare hotel mortgage lenders across our panel of 100+ specialist commercial finance providers to find the mortgage you need. Whether you want to get a mortgage to buy your first hotel or refinance a portfolio of hotel properties, we lend our expertise to every application. Matt Lenzie's corporate banking background at Lloyds Bank and Bank of Scotland means we understand business finance, business mortgage structures, and what lenders look for.

Advice Matched to the Asset

Every hotel is different, from boutique hotels in coastal towns to large city-centre conference venues. We tailor our advice to the specific hotel you want to buy, ensuring you access the best hotel mortgage rates and terms available. Our mortgage for a hotel purchase expertise covers all standard commercial and specialist lending products. Contact us for a free, no-obligation consultation.

Reading Hospitality Risk

The hospitality industry operates differently from other commercial property sectors. Seasonal trading patterns, event-driven demand, and the impact of reviews and reputation on occupancy all affect how lenders assess hotel mortgage applications. A specialist hotel mortgage broker understands these dynamics and can present your application in a way that highlights strengths and addresses potential lender concerns proactively. We prepare detailed trading analyses, competitive market assessments, and operational improvement plans to support every hotel mortgage application we submit.

Hotel Finance Options: Business Loans and Commercial Lending

Beyond a standard commercial mortgage to purchase or mortgage to purchase a hotel, several other finance options are available. A business loan can fund working capital, equipment, or minor refurbishments. Hotel loans and hotel funding packages can be structured to match seasonal cash flow patterns common in the hospitality sector.

For operators looking to finance a hotel acquisition alongside property improvements, we can arrange combined hotel finance packages that cover both the hotel purchase and the refurbishment costs. Commercial bridging is also available for buying a hotel at auction or other time-sensitive purchases.

Choosing a Rate Structure

Interest rate structures vary across products: fixed-rate hotel mortgage products offer repayment certainty, while variable rates may suit operators confident in their personal and business revenue growth. Business credit history and per available room metrics are key to unlocking the best terms. Hotel mortgage rates reflect the assessed risk, so strong trading accounts and a proven business plan are essential. Try our hotel mortgage calculator to model your borrowing costs.

Building From the Ground Up

Development finance for new hotel construction or major refurbishment projects is structured differently from standard hotel mortgages. The lender releases funds in stages as construction progresses, with the total facility based on the projected completed value and trading performance. Once the hotel is operational and trading, the development finance is typically refinanced onto a standard commercial mortgage at more competitive long-term rates. Our team arranges end-to-end hotel development packages covering acquisition, construction, and permanent refinancing, ensuring continuity and competitive terms throughout the project lifecycle.

Matt Lenzie brings decades of banking expertise to every hotel finance application, ensuring institutional-quality structuring and presentation to lenders across our panel.

“A hotel is a trading business first and a building second, and I underwrite it that way. Lenders here want two or three years of accounts and they price on RevPAR and occupancy, not just the address. I have watched a well-run coastal hotel out-borrow a bigger city property purely on the strength of its trading. Bring me clean numbers and I will find the lenders who reward them.”
ML

Matt Lenzie

Founder & Principal Broker, Commercial Mortgages Broker

Frequently Asked Questions

Can you get a mortgage on a hotel?

Yes. Specialist hotel mortgage lenders offer commercial mortgages for hotels of all sizes, from small B&Bs and boutique hotels to large conference venues. Deposits typically start at 30% and lenders assess occupancy rates, RevPAR, and operator experience.

What deposit do I need to buy a hotel?

Most hotel mortgage lenders require a deposit of 30-40% of the property value. Experienced operators with strong trading history may access up to 70% LTV.

What are typical hotel mortgage rates?

Hotel mortgage rates typically range from 6.75% to 10.00% depending on LTV, property type, trading performance, and borrower experience. The best rates are available for established hotels with strong occupancy and revenue.

Can I get a mortgage to buy my first hotel?

Yes, though lenders will scrutinise your hospitality experience more closely. A strong business plan, relevant industry experience, and a larger deposit (35-40%) will improve your chances of mortgage approval.

Can I use a bridging loan to buy a hotel at auction?

Yes. Bridging finance can complete in 7-14 days, allowing you to meet auction deadlines. You can then refinance onto a longer-term hotel mortgage within 6-12 months.

What is revenue per available room (RevPAR)?

RevPAR is a key hotel industry metric calculated by multiplying the average daily room rate by the occupancy rate. Lenders use RevPAR to assess the trading performance and debt serviceability of a hotel mortgage application.

How long does it take to get a hotel mortgage?

Typically 8-16 weeks from initial enquiry to completion, depending on the complexity of the deal. Hotel mortgages often take longer than standard commercial mortgages due to the additional trading analysis required.

Related Pages

Pub & Restaurant MortgageGuest House MortgageHoliday Park MortgageCommercial Mortgage RatesCommercial Bridging LoansDevelopment FinanceCommercial Mortgage Calculator

Key Concepts

Commercial mortgageLoanMortgageInterestFinanceInterest rate

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Speak to our specialist team for a free, no-obligation consultation. We compare deals across 100+ lenders to find the right mortgage for your property.