Commercial mortgages
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The basics

Commercial mortgage jargon buster

A plain-English glossary of the terms you’ll come across, all in one place.

Written by Matt Vincent DipFA, CeMAP, CeRER, BSc  ·  Published 25 June 2026  ·  Version 1.0  ·  6 min read
Quick answer

Commercial lending has its own language. Here are the terms you're most likely to meet, explained simply.

Owner-occupier / trading mortgage
A loan for a business buying premises it will run from. Repaid from business profits.
Investment mortgage
A loan for property you rent out. Repaid from the rent your tenants pay.
Semi-commercial (mixed-use)
A property that is part business, part residential, like a shop with a flat above.
LTV (loan-to-value)
The loan as a percentage of the property's value. Lower is usually cheaper.
Capital & repayment
Monthly payments cover interest and reduce the balance, so you owe nothing at the end.
Interest only
Monthly payments cover only interest; the full balance is still owed at the end.
Fixed rate
An interest rate locked for a set period, so your payment doesn't change.
Variable rate
A rate that can move, usually tracking the Bank of England base rate or a lender's standard rate.
SPV (Special Purpose Vehicle)
A limited company set up purely to hold property.
Debenture
Security a lender takes over a company's assets, registered at Companies House.
Personal guarantee (PG)
A director's personal promise to repay the company's loan if the company can't.
Rental cover / interest cover
How comfortably the rent covers the mortgage payment, lenders want a margin to spare.
Arrangement fee
The lender's fee for setting up the loan, often 1–2% of the amount.
Early repayment charge (ERC)
A charge for repaying or leaving a deal early, common on fixed rates.
EPC
An energy efficiency rating from A to G that can affect which lenders will help.
Refinance
Replacing an existing mortgage with a new one, often to get a better rate or release equity.

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Prefer to talk it through? Call 0333 121 0050 or email Commercial@positivelending.co.uk

Related guides

What is a commercial mortgage?→Loan-to-value (LTV) explained→What is a debenture, and why do lenders ask for one?→

This guide was published on 25 June 2026 (version 1.0) and reflects our understanding at that time. It is general information about commercial mortgages, not financial advice or a recommendation. Lending criteria, interest rates and tax rules change over time, so please confirm current details with a qualified advisor before acting. Reference: PL-CM-GLOSSARY-v10.

Your property may be repossessed or a receiver appointed if you do not keep up repayments on a mortgage or any other debt secured on it. This service is provided direct to consumers and covers commercial mortgages only. Positive Lending is a broker, not a lender. Commercial mortgages and certain buy-to-let mortgages are not regulated by the Financial Conduct Authority (FCA). As a result, they do not provide the same level of consumer protection as regulated mortgage products and should only be considered for business or investment purposes. The rates, fees and monthly figures shown are indicative estimates for comparison, not offers of finance, quotes or guarantees of what any lender will provide; your actual terms depend on a full assessment by the lender. This tool is for information only and does not provide financial, mortgage, tax or legal advice; always speak to a qualified adviser before making a decision.