Can you get a mortgage on a warehouse?

A warehouse mortgage is a commercial mortgage secured on a warehouse or industrial building, used either by a business that occupies the space or by an investor who lets it to a tenant. The short answer to the headline question is yes: you can get a mortgage on a warehouse, and lenders treat warehouses as mainstream commercial security. We arrange warehouse and industrial finance across the UK, and as an introducer rather than a lender we take each case to the lenders most comfortable with the building, the use and the borrower.

This guide explains how a mortgage on a warehouse works, the difference between borrowing as an owner-occupier and as an investor, how much you can borrow and what deposit you need, how lenders value an industrial building, and what they look for in an application. We also answer the questions buyers ask most often, including how much deposit a warehouse needs and how a warehouse mortgage is repaid. The aim is to show you that warehouse finance is well understood by the right lenders, and that a well-prepared case secures good terms.

Can you get a mortgage on a warehouse in the UK?

Yes, you can get a mortgage on a warehouse, and a warehouse is one of the more straightforward commercial assets to finance because lenders see industrial and logistics property as dependable security. A warehouse, an industrial unit or a distribution shed is a standard commercial building, and a commercial mortgage secured against it works much like one secured against any other business premises: the lender lends against the value of the property and the income behind the loan, and takes a first charge over the building.

Demand for industrial and logistics space has stayed strong, which helps the lending case. Prime industrial yields have held broadly stable at around 5.00 to 5.25 percent (Knight Frank, December 2025), and prime big-box rents have stood at around 11.90 pounds per square foot (Colliers, June 2025), signs of a sector that lenders regard as resilient. A warehouse in a good location with sound construction is therefore an asset most commercial lenders are happy to lend against, often more readily than they would on quirkier property types.

That said, not every warehouse is equally easy to finance. A modern unit on an established estate with good access is straightforward, while an old, isolated or highly specialist building can be harder to place, because a lender weighs how readily it could be resold if the loan failed. The use, the condition and the location all feed into the decision, and matching the building to the lenders comfortable with that profile is where careful placement pays off.

Location carries particular weight with industrial and logistics property. A warehouse near a motorway junction or within easy reach of a major conurbation serves the distribution networks that drive demand for the sector, and lenders treat such a unit as more liquid and more lettable than one tucked away with poor road links. Proximity to the established logistics corridors, and the labour and transport links that come with them, supports both the value and the lender's confidence, which is why the same building can be viewed quite differently depending on where it sits.

The legal basis of the purchase also affects how easily a warehouse can be financed. A freehold warehouse is the most straightforward, because the borrower owns the land and building outright and the lender's charge is clean. A long leasehold can still be financed, but the lender will look at the length of the lease remaining, the ground rent and any restrictive terms, since a short or onerous lease can dent the value and the resale prospects. We check the tenure at the outset, because an issue with the lease is far better dealt with early than discovered when the lender's solicitor reviews the title.

Owner-occupier or investment: which warehouse mortgage do you need?

The right product depends on who will use the warehouse. An owner-occupier mortgage is for a business buying a warehouse to operate from itself, storing stock, running logistics or manufacturing on site, and the loan is repaid from the trading profit of that business. The lender assesses the company's accounts and the affordability of the repayment against its income, and owning the premises gives the business control over its space and protection from rising rents.

An investment mortgage, sometimes called a commercial investment mortgage, is for a buyer who lets the warehouse to a tenant and holds it for rental income. Here the loan is repaid from the rent, so the lender looks at the lease, the rent and the strength of the tenant rather than the borrower's own trade. A long lease to a strong tenant supports a keener rate and a higher loan, while a short lease, a weak tenant or a vacant unit makes the lender more cautious. The covenant of the tenant, meaning its financial strength and reliability, often matters as much as the rent itself, because a strong tenant on a long lease underpins the income the loan depends on.

Investors are drawn to warehouse and logistics property because the sector has proved resilient and the leases tend to be long, with the tenant carrying much of the repair and insurance burden under a full repairing and insuring lease. That can mean a steadier net income and less day-to-day management than other property types. The trade-off is that a single warehouse let to one tenant carries concentration risk: if that tenant leaves, the whole rent goes with them until the unit is relet, so the quality and length of the lease are central to how a lender prices the loan.

The same warehouse can be financed either way depending on who occupies it, and the distinction shapes everything from the assessment to the deposit. Some buyers occupy part and let the rest, which is a more involved case that blends the two. We establish the intended use first, then match the warehouse to the right product and the lenders who specialise in it, because an owner-occupier case and an investment case go to different parts of the market.

The owner-occupier route carries an important regulatory dimension worth flagging. Where a warehouse is bought purely as a business premises by a company, the loan is unregulated business lending. Where an individual borrows in a way that brings a residential element into play, the regulated question can arise, though for a pure warehouse used wholly for business this is uncommon. The more typical position is an unregulated commercial mortgage, and we confirm the classification at the outset so the case goes to lenders who can lend on the right basis and the borrower understands which protections apply.

There is also a tax and ownership angle that often shapes the choice. An owner-occupier buying through a pension scheme, such as a self-invested personal pension, can hold the warehouse in the pension and have the trading business pay rent to it, which can be efficient and is a route we see frequently with established businesses. An investor, by contrast, is usually focused on the yield the warehouse produces and the prospect of capital growth over time. The structure that suits a buyer depends on their wider position, and it influences which lenders and which products fit, so it is worth settling before approaching the market.

How much can you borrow and what deposit do you need?

On a warehouse mortgage you can usually borrow around sixty to seventy-five percent of the property's value, meaning a deposit of twenty-five to forty percent. Owner-occupier deals often reach the higher loan to value because the lender takes comfort from the trading business, while investment deals can sit a little lower because repayment depends on a tenant continuing to pay rent. The exact figure turns on the building, the income and the borrower's profile rather than a fixed rule, and there is no minimum deposit set in law, so the figure is a commercial judgement that varies from one lender to the next on the same warehouse.

How much you can borrow is governed as much by affordability as by the property's value. On an owner-occupier deal the lender tests whether the trading profit comfortably covers the repayment, and on an investment deal it applies an interest cover test, checking the rental income exceeds the mortgage interest with a margin to spare. A warehouse that is worth a great deal but generates thin income will still face a borrowing cap set by that income, so the two tests work together.

Beyond the deposit, a buyer needs cash for the surrounding costs, including stamp duty land tax on the commercial property, legal fees, the valuation fee and the lender's arrangement fee. Where a buyer needs to complete quickly, for example a warehouse bought at auction, a bridging loan can fund the purchase fast with a commercial mortgage arranged afterwards to repay it. We set out the full borrowing and cash picture early so the deposit, the costs and the timeline all line up.

The repayment basis affects how much a borrower can comfortably carry. A warehouse mortgage can be arranged on a capital and interest basis, where the loan reduces over the term, or on an interest-only basis, where only the interest is paid and the capital is repaid at the end from a sale or refinance. Interest-only keeps the monthly cost lower and is common on investment deals where the rent does the work, while capital and interest steadily builds equity and is often preferred by owner-occupiers. The choice changes both the monthly outgoing and the eventual exit, so we weigh it against the borrower's plans for the building.

A larger deposit does more than lower the rate on a warehouse mortgage; it can be the difference between a deal proceeding and stalling. A borrower able to put in thirty-five or forty percent presents a low loan to value that most lenders are comfortable with even on a less mainstream building, while a borrower stretching to seventy-five percent leaves the lender with a thin cushion and invites closer scrutiny of the unit, the income and the covenant. Where a buyer wants to borrow at the top of the range against a specialist warehouse, the case has to be especially strong, and we shape it accordingly before going to market.

How do lenders value a warehouse for a mortgage?

A lender values a warehouse to decide how much it will lend, and the valuation is often the decisive checkpoint in the whole process. The surveyor considers the building's size, construction, condition, eaves height, access and location, because all of these affect what the warehouse is worth and how easily it could be relet or resold. A modern, well-specified unit in a strong industrial location values more reliably than an ageing or specialist building.

On an investment warehouse the valuation often leans on the rental income, using a yield-based approach where the value reflects the rent the building produces and the strength of the lease, alongside the bricks-and-mortar value. A keener yield, supported by a strong tenant on a long lease, lifts the value, while a weaker letting position pulls it down. On an owner-occupied warehouse the surveyor may also provide a vacant possession value, what the empty building would fetch on the open market, since that is what the lender could recover if the business failed and the unit had to be sold without a tenant in place.

A cautious valuation constrains the loan regardless of the price agreed, because the lender lends against value, not purchase price. Where the two diverge, the borrower may need a larger deposit to bridge the gap. We prepare for the valuation by evidencing the rent, the lease and the condition of the warehouse, and by choosing lenders whose valuers understand industrial property, so the figure that comes back supports the deal rather than undercutting it.

It helps to understand the different bases a surveyor may use, because they can produce quite different numbers for the same warehouse. A market value reflects what the building should fetch in a normal sale with a willing buyer and seller. A vacant possession value strips out any tenant and asks what the empty unit is worth, which can be lower for a specialist building. A yield-based or investment value capitalises the rent the warehouse produces, so a strong lease lifts it. The lender chooses the basis that matches the deal, and a borrower who knows which one applies is better placed to understand the loan that follows.

Condition and specification feed directly into the figure. Eaves height, floor loading, the quality of the loading doors, the office content and the state of the roof and yard all affect how a modern occupier would rate the unit, and a warehouse that no longer meets the practical needs of today's logistics tenants can value below an equivalent modern shed. Energy performance is part of this too, since a poor rating limits who can lawfully occupy the building and weighs on its value. We flag these factors before the valuer attends, because a building presented well, with works in hand where they help, gives the best chance of a supportive figure.

What do lenders look for in a warehouse mortgage application?

Lenders assessing a warehouse mortgage weigh the same core pillars as any commercial mortgage, applied to the particular building. The first is the income behind the loan, the trading profit of an owner-occupier or the rental income and tenant strength on an investment deal, tested for comfortable cover of the repayment. The second is the deposit and the loan to value, since a larger deposit lowers the lender's risk and improves both the rate and the appetite to lend.

The third pillar is the warehouse itself as security. Lenders favour a standard, modern unit in a good location with sound construction and flexible use, because it is easier to resell, and they grow cautious where the building is old, isolated, highly specialist or in poor repair. Energy efficiency increasingly matters too, since minimum energy efficiency standards affect whether a commercial property can be let, and a poor rating can dent both value and lettability. The fourth pillar is the borrower, including credit history, sector experience and the credibility of the plan.

Because these pillars combine, a strength in one can offset a weakness in another, and an investor with a modest deposit but a long lease to a strong tenant may still secure good terms. Our role is to read which lenders are comfortable with the particular warehouse and use, present each pillar at its strongest, and answer the lender's likely questions in advance, which is what turns a workable case into a competitive offer.

Lenders also weigh the borrower's experience and plans for the building. An established business buying a warehouse to expand into, with accounts that show it can carry the repayment, is an easy case to understand. An investor with a track record of holding and letting industrial property reassures a lender that the asset will be managed and kept let. A first-time buyer or a borrower with a thin record is not shut out, but the rest of the case, the deposit, the income and the quality of the unit, needs to carry more of the weight, and we present it so those strengths stand out.

How is a warehouse mortgage repaid and refinanced?

A warehouse mortgage is repaid over its term either on a capital and interest basis, where each payment reduces the balance until the loan clears, or on an interest-only basis, where the monthly payment covers only the interest and the capital is settled at the end. Owner-occupiers often favour capital and interest because it builds equity in the premises over time, while investors frequently choose interest-only so the rent supports the lowest possible monthly cost and the capital is repaid from a future sale or refinance.

Refinancing a warehouse is common and a normal part of holding the asset. A borrower may remortgage at the end of a fixed rate to secure a better rate, to release equity where the value has risen, or to change the term or repayment basis as the business or the investment plan evolves. Where a warehouse was bought quickly with a bridging loan, perhaps at auction, the commercial mortgage that follows is itself a refinance, repaying the short-term loan with long-term funding once the building is settled and the income is in place. Releasing equity through a remortgage can also free capital to buy a further unit or invest in the business, turning the warehouse into a source of funding as well as a premises.

Each refinance is assessed much like a fresh application, with an up-to-date valuation, recent accounts or rental evidence, and confirmation that the loan still fits the lender's criteria. Where the warehouse has risen in value or the income has strengthened, the borrower may qualify for a lower loan to value and a sharper rate than first time around, so a refinance is an opportunity rather than just a renewal. We treat the end of a rate period as a planning point, reviewing the market well before it expires so the next step is arranged in good time rather than slipping onto an expensive reversion rate.