Owner-Occupier Commercial Mortgages Devon
Long-term debt funding the purchase of the property your business trades from. Up to 75% loan-to-value. EBITDA cover at 1.3–1.5×. Interest rates 6.0–7.5% pa for strong covenants. 5–25 year repayment terms. Active across dental, accountancy, marine and engineering, light industrial, professional services and pharmacy in Exeter, Plymouth and across Devon.
LTV
Up to 75%
Rate
From 7.0% pa
Term
5–25 years
Facility
£150K–£5M
What is an owner-occupier mortgage and how does it differ from investment?
An owner-occupier commercial mortgage is long-term secured debt funding the purchase of the property your business trades from, your dental practice freehold, your accountancy office, your engineering workshop, your trade-counter unit. The lender takes a first charge over the building; you fund a deposit (typically 25–30%); the facility is amortised over 15–25 years on monthly capital-and-interest repayments. Most owner-occupier deals are taken out by a limited company trading entity with a personal guarantee from the directors, though sole traders, partnerships and LLPs are equally accommodated.
The lending test is fundamentally different from an investment mortgage. Where investment lenders test rent against interest cost (ICR), owner-occupier lenders test EBITDA cover: trading profit (earnings before interest, tax, depreciation and amortisation) measured against the mortgage payment, with a typical comfort threshold of 1.3–1.5×. Two years of clean filed accounts is the standard minimum, though specialist desks flex this for established sectors (dental, GP, pharmacy) on 12–18 months trading.
It is also different from a residential mortgage, and that distinction matters legally. Owner-occupier commercial lending falls largely outside FCA-regulated mortgage rules, because the borrower is a business buying business premises (not an individual buying a home). The exception: where a sole trader uses the property partly as a residence, the deal can fall into FCA-regulated territory; we flag that at outset. For limited-company borrowers buying B-class commercial stock, the deal is unregulated commercial lending.
In Devon the typical owner-occupier facility size is £150K–£3M, with the bulk of volume in the £500K–£1.5M bracket. LTVs of 70–75% are routine for established businesses. Interest rates currently 6.0–7.5% pa for strong covenants, stretching to 9.0% on tighter cases. Term length is the most useful affordability lever, extending repayment from 15 to 20 years often clears the EBITDA test where rate alone will not. Stamp duty (SDLT) on commercial purchase applies up to 5% on the slice above £250,000; we factor it into the deposit-and-fees model before submission.
Lender appetite and rates for owner-occupier deals across the South West
1. Initial appraisal
Send the property details, last two years of accounts and current management figures. We assess affordability, sector appetite, likely loan-to-value and which lender desks will engage.
2. Indicative terms in 48 hours
Three to five lender quotes, interest rate, LTV, term, fees, conditions. You pick the preferred route before any valuation cost lands.
3. Application packaging
Full credit pack: filed accounts, business plan, property details, deposit proof, professional team. A clean pack speeds credit committee approval.
4. RICS Red Book valuation
Critical-path item, typically 2–3 weeks. The lender instructs from a panel; valuation comments on bricks-and-mortar value and any specialist sector overlay.
5. Credit approval
Most well-presented owner-occupier cases approve within 1–2 weeks of valuation. Clean covenant, clean property, clean numbers, minimum friction.
6. Legal completion and SDLT
Standard freehold conveyancing plus debenture and personal guarantee. Stamp duty land tax payable by the buyer at completion. 3–4 weeks typical.
Sectors where Devon owner-occupier lending is deepest
- Dental practice principals buying their freehold (Exeter, Plymouth, the Riviera and the market towns)
- Accountancy, legal, financial services and consultancy firms buying their office
- Light industrial, engineering and trade-counter businesses (Marsh Barton, Sowton, Brunel Estate Newton Abbot, Langage near Plymouth)
- Marine and defence-supply-chain businesses around Plymouth and Devonport acquiring premises
- Pharmacy operators acquiring trading premises across Devon high streets
- Independent retailers buying their high-street unit (Fore Street Exeter, Torquay harbourside, Barnstaple High Street)
- Health and wellness operators (clinics, physio, opticians, vets) acquiring premises
- Professional services partnerships transitioning from leasehold to freehold ahead of a partner buy-out
Why Devon has steady owner-occupier capacity
Eight challenger banks compete on this exact product into Devon and the South West. Shawbrook, InterBay Commercial (OSB Group), Allica Bank (national, strong SME book), HTB, Cambridge & Counties, Aldermore, YBS Commercial and Cynergy Bank all run active programmes. NatWest, Lloyds commercial banking, Barclays and Santander Corporate compete on the larger end across the Exeter and Plymouth professional markets. Sector clusters worth noting: dental and GP practices around Exeter, marine and engineering around Plymouth and Devonport, light industrial in Marsh Barton, Sowton and the Newton Abbot Brunel Estate, professional services across the county. Refinancing volume is particularly strong on assets bought 2019–2021 where current valuations support a meaningfully better LTV than the original draw.
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Exploring Owner-Occupier Commercial Mortgage for your Devon scheme?
Free-of-charge scheme assessment. Indicative terms within 48 hours.