Pub Mortgage UK Commercial Mortgages for Pubs, Bars and Restaurants

Mortgage rates for pubs and restaurants typically range from 6.75% to 10.00%, depending on the lender, LTV, and the strength of the pub business. Interest rates tend to be slightly higher than for standard commercial property because the hospitality sector carries perceived operational risk. A higher interest rate reflects the lender's assessment of the business, not just the property value.

Fixed, Variable and Loan-to-Value

Both fixed and variable rate options are available. Fixed rates offer repayment certainty for 2-5 years, while variable rates track the Bank of England base rate. Mortgage lenders will typically offer up to 65-70% LTV on established trading pub premises, with a freehold pub mortgage generally attracting better terms than leasehold arrangements.

For a commercial mortgage for a pub, lenders assess trading accounts (at least 2-3 years of previous trading data), projected cash flow, and the future prospects of the business. A strong business case with realistic revenue projections will help secure mortgage approval. Use our mortgage calculator to estimate your repayments on your mortgage.

The True Cost of Borrowing

Beyond the headline interest rate, the total cost of a pub mortgage includes arrangement fees, specialist hospitality valuation costs (which are higher than standard commercial valuations due to the trading element), legal fees, and broker fees. For freehold pub purchases, stamp duty land tax is calculated on the total purchase price at commercial rates. For leasehold purchases, the premium paid for the lease and business is the basis for SDLT calculation. Our team provides a full cost breakdown before you commit, ensuring there are no surprises during the purchase process.

The cost of a specialist hospitality valuation typically ranges from £2,500 to £5,000, reflecting the additional analysis required to value a trading business as opposed to a simple commercial property. The valuer will consider the pub wet and dry sales, food revenue, accommodation income (if applicable), gaming machine income, and event revenue when assessing the business value. A well-prepared set of trading accounts that clearly breaks down revenue streams will support a higher valuation and therefore better lending terms.

The type of commercial mortgage available depends heavily on whether the pub is freehold or leasehold. A freehold pub mortgage gives you ownership of both the business and property, which lenders prefer as it provides stronger security. Leasehold pub purchases require the lease to have sufficient unexpired term (usually 25+ years remaining).

Lenders read the tie before the trade. A freehold pub with clean accounts borrows on very different terms from a leasehold tied to a brewery, because the beer tie eats into the margin the loan has to be serviced from.

Additional Funding Routes

Finance options beyond a standard mortgage to buy a pub include commercial loans for working capital, equipment finance, and bridging loans for time-sensitive purchases. Securing finance for a pub often requires a form of security beyond the property itself, personal guarantees or other assets may serve as additional collateral.

For operators wanting to buy or refinance a pub, or those managing multiple properties in the hospitality industry, portfolio lending arrangements can streamline the process. A standard commercial mortgage may work for straightforward acquisitions, while more complex deals benefit from specialist structuring. The commercial lending team at CMB can advise on the best type of loan for your pub purchase.

Weighing the Two Structures

The choice between freehold and leasehold affects not just the mortgage product but also the long-term financial prospects of your pub investment. Freehold ownership provides security, capital growth potential, and the flexibility to develop or change the use of the property. Leasehold arrangements typically involve lower upfront costs but come with ongoing rent obligations and the risk of lease expiry or rent reviews. Some pub leases include tie-in agreements requiring the purchase of drinks from a specific brewery or supplier, which can affect profitability and therefore mortgage affordability. Our team advises on the financial implications of both freehold and leasehold pub structures.

For operators running multiple pub sites, portfolio lending arrangements can simplify borrowing and often provide better overall terms. Cross-collateralisation across properties, combined annual reviews, and volume-based pricing are available from specialist hospitality lenders. Our team structures portfolio finance packages that scale efficiently as your pub business grows.

Finding the right commercial pub mortgage requires a specialist broker who understands the hospitality industry. Not every lender has appetite for pub finance, and a pub mortgage without the right broker support can be difficult to arrange. Our mortgage broker team compares mortgage lenders across our panel of 100+ specialist commercial lenders to find the mortgage you need.

Guidance From Enquiry to Drawdown

We provide a comprehensive guide to commercial pub finance, covering every aspect from initial enquiry through to drawdown. Matt Lenzie's experience in corporate finance at Lloyds Bank and Bank of Scotland means we understand commercial lending, business finance, and what lenders look for in a hospitality business application. We also help with finance a pub refurbishment, commercial hotel mortgages, and wider hospitality sector lending.

To get a mortgage on a pub or restaurant, or to explore your mortgage options, speak to our team. We offer free initial consultations and no-obligation mortgage quotes for pubs across the UK. A residential mortgage will not work for a trading business, you need specialist commercial finance structured for the hospitality sector.

Deep Licensed-Trade Access

Our specialist pub mortgage broker service covers every aspect of hospitality finance, from initial business plan review through to completion and beyond. We maintain relationships with the UK leading pub and hospitality lenders, including specialist providers who focus exclusively on the licensed trade. This deep market knowledge means we can often identify lending opportunities that generalist brokers or high-street banks would miss. Whether you are an experienced publican or entering the industry for the first time, our team provides the expert guidance and market access you need to secure the best possible pub mortgage terms.