Commercial Investment Mortgage Cambridge
Long-term mortgages secured against income-producing commercial property: lab and office investment, central retail, Newmarket Road hotels and mixed-use. Up to 75% loan-to-value. Interest cover ratio test 140 to 160% stressed. Interest rates 6.5 to 8.5% pa. 5 to 25 year repayment terms. Limited company SPV, LLP and individual structures all supported.
LTV
Up to 75%
Rate
From 6.5% pa
Term
5 to 25 years
ICR
140 to 160%
What is an investment commercial mortgage and how is it underwritten?
A commercial investment mortgage is long-term debt secured against a let commercial property held as an income-producing asset. The borrower is typically a limited company SPV (the dominant structure for new acquisitions across the Cambridge market), an LLP, or an individual investor; the security is the property; the affordability test is rent against the cost of borrowing. Unlike a residential buy-to-let mortgage, which tests personal income and rental yield against ASTs, commercial investment underwrites against business tenancies on FRI (full repairing and insuring) leases.
The headline underwriting metric is the interest cover ratio (ICR): gross rent divided by interest cost, typically required at 140 to 160% stressed at a notional rate 1 to 2% above pay rate. Some lenders also test DSCR (debt-service coverage ratio) on a fully-amortising basis at 130 to 145% cover. Loan-to-value commonly stretches to 65 to 75% for income-producing assets with a clear lease.
Tenant covenant and lease length are the second-order drivers, and they matter as much as LTV. A 10-year unbroken lease to an investment-grade life sciences tenant on a Cambridge Science Park building prices materially better than three two-year leases to local independents on a secondary Newmarket Road parade. Vacant or part-let assets fund through specialist desks at tighter LTVs and wider interest rates, typically via commercial bridge-to-let with an agreed term-out exit.
Investment commercial lending sits outside FCA regulation in almost all cases: it is a business borrowing against a business asset, not a residential mortgage. Stamp duty land tax applies on purchase at the standard commercial rates (0% to £150K, 2% £150K to £250K, 5% above £250K). For limited company SPV structures we factor SDLT, valuation, legal and arrangement fees into the all-in deposit requirement before submission. Indicative case seed: a £3.2M let lab investment on the CSP fringe, FRI lease, 8 years unbroken, strong-covenant life sciences tenant, prices at 65% LTV (£2.08M facility) on a 5-year fix at around 7.0% pa with ICR comfortably above 150%.
Pricing and lender appetite across the Cambridge investment market
1. Asset and rent appraisal
We review the property, the lease, the tenant covenant and the rent roll. ICR and DSCR modelled at three lender stress rates so you see where each desk will land.
2. Indicative terms in 48 hours
Three to five lender quotes covering interest rate, LTV, term, fees, ICR comfort and conditions. You pick the preferred route.
3. Credit pack
Property file, lease, tenant accounts (where covenant matters), borrower SPV pack, deposit proof. Sent to chosen lender.
4. RICS Red Book valuation
Includes market rent assessment and estimated rental value (ERV), both important to the underwrite. Typically 2 to 3 weeks.
5. Credit approval and legal pack
Approval typically 1 to 3 weeks post-valuation. Legals 3 to 5 weeks (longer if leasehold or complex tenant pack).
6. Drawdown and SDLT
Funds drawn at completion. Stamp duty paid by buyer. ICR sometimes monitored through life of facility on larger or multi-let assets.
Investor profiles we routinely place across Cambridge
- Lab and office investment buyers on Cambridge Biomedical Campus, Cambridge Science Park, Granta Park and Babraham Research Campus
- Central retail investors on Sidney Street, the Grand Arcade catchment, Lion Yard and Petty Cury
- Newmarket Road hotel and roadside hospitality investors backing the tourism economy (~8 million annual visitors)
- Mill Road and Romsey independent F&B and retail investment buyers
- Cherry Hinton and Chesterton multi-let industrial investors on the city fringe
- Limited company SPV structures for new acquisitions; individual investor purchases at the smaller end
- Refinancing existing investment portfolios off maturing 5-year fixes from 2019 to 2021 vintage
- Hands-off investors buying long-WAULT trade-counter or roadside assets let to national covenants
Where Cambridge commercial investment volume actually sits
Cambridge runs one of the firmest regional commercial investment markets in the UK: structurally low vacancy, rents and yields that hold up firmer than the regional UK average, and a deal flow dominated by lab and office investment around Cambridge Biomedical Campus, Cambridge Science Park, Granta Park and Babraham Research Campus, central retail on Sidney Street, the Grand Arcade catchment and Lion Yard, and Newmarket Road hotels. The £500K to £3M bracket is the deep volume zone for smaller landlords: parade retail on Mill Road and the Chesterton high street, semi-commercial blocks across Romsey and Petersfield, and central upper-floor mixed-use throughout the CB1 and CB2 ring. The £3M to £15M+ bracket is where the lab and office investment flow sits, particularly around the CSP and CBC clusters. Lab investment yields currently sit firmer than the wider UK regional office market, reflecting structural demand from the life sciences cluster. Interest rates currently 6.5 to 8.5% pa depending on covenant and LTV. Cambridge & Counties Bank, Cambridge-headquartered, runs an active local commercial investment programme particularly on £500K to £3M deals; Shawbrook, InterBay Commercial, Cynergy Bank, LendInvest, NatWest, Lloyds, Barclays and Santander all compete on Cambridge commercial investment cases.
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Exploring Commercial Investment Mortgage for your Cambridge scheme?
Free-of-charge scheme assessment. Indicative terms within 48 hours.