Hotel Mortgages
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Whole of market
Operators and Investors
Securing the right hotel mortgage is a key step for both experienced operators and new investors looking to purchase or refinance a hotel. Whether you’re acquiring a single boutique property or expanding a larger portfolio, a tailored commercial mortgage for hotel purchase can provide the funding you need to achieve your acquisition goals. We support hotel operators and investors by sourcing competitive, flexible finance solutions from across the market. As experienced hotel mortgage brokers, we understand the unique cash flow patterns and operational challenges within the hospitality sector, and we work closely with lenders to structure deals that work for your business model, whether you’re trading under a franchise, independently, or investing through a limited company. We also have a streamlined strategy to support borrowers looking to purchase a closed hotel with a commercial mortgage, offering short term funding options to borrowers looking to renovate and procure trading accounts.
Hotel mortgages for operators
For hotel operators looking to secure a commercial mortgage for a hotel, the strength of your trading performance plays a crucial role. Most hotel mortgage lenders assess affordability using a loan-to-EBITDA ratio, meaning your accounts must show sufficient profitability to support the level of borrowing required. This approach helps lenders ensure the hotel commercial mortgage can be comfortably serviced from the business’s earnings. If you’re an operator with a well-performing business, you may be able to access more competitive hotel mortgage rates, along with higher loan amounts and more flexible terms. However, if you’re acquiring a non-trading or closed hotel—where proven profitability can’t yet be demonstrated, your options may be more limited. In these cases, commercial mortgages for hotels are typically assessed on the property’s underlying value, with lenders offering up to 70% Loan to Value against a 90-day bricks and mortar valuation. Borrowers who are looking to develop hotels can benefit from 36 month short term funding without exit fees to help develop and do a hotel refinance within the term. Whether you’re refinancing, expanding, or acquiring a new site, we can help match you with hotel financing lenders who understand the operational nuances of the hospitality sector and offer bespoke mortgage solutions tailored to your goals.
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Investment hotel mortgages
For property investors, securing a commercial mortgage for a hotel is often centred around the lease in place, rather than the trading performance of the business itself. To achieve the most favourable terms and benefit from a strong MV1 (investment) valuation, lenders will typically require a robust lease agreement in place—ideally with a large, recognised hotel operator. To access competitive hotel mortgage rates and higher valuations, the lease must be long-term, without early break clauses, and structured to provide security over time. The strength of the tenant and the lease length are both key to unlocking uplifted valuations and attracting the best hotel mortgage lenders. Crucially, the rent must also be sufficient to meet the lender’s affordability criteria, ensuring the hotel commercial mortgage is adequately covered. As experienced brokers in commercial mortgages for hotels, we help investors structure deals that maximise property value and borrowing potential. From institutional-grade leases to boutique hotel investments, we guide you through the lending landscape to find a solution tailored to your investment strategy.
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Hotel mortgage sector experience required?
When applying for a hotel commercial mortgage, experience in the hospitality or property sector isn’t always a requirement, but it can significantly impact the terms available. Most hotel mortgage lenders will still consider first-time borrowers, especially if the lease or business fundamentals are strong. However, those with at least two years of relevant sector experience, whether as an operator or an investor, are more likely to secure better hotel mortgage rates, higher loan amounts, and more flexible repayment structures. Experience gives lenders added confidence that the hotel will be managed effectively, whether it’s a trading business or a leased investment. For both commercial mortgages for hotels and development finance, having a proven track record can open the door to more competitive products and streamlined approvals.
Questions about hotel mortgages
Yes, you can get a mortgage for a hotel and it’s commonly done through a commercial mortgage for hotel purchase, refinance, or development. Whether you’re an operator running the hotel day-to-day, or an investor leasing it to a hospitality brand, specialist lenders provide tailored mortgage solutions based on the property type, lease or trading performance, and your experience.
Unlike standard residential mortgages, a hotel mortgage is assessed on factors like:
- Profitability (for operators)
- Lease strength and tenant quality (for investors)
- Experience in the sector
- Loan-to-Value (LTV) ratio
- EBITDA or rent coverage for affordability
Working with expert hotel mortgage brokers can help you access lenders who understand the hospitality sector and offer bespoke terms, especially important for more complex or high-value deals.
The minimum down payment for a hotel purchase using a commercial mortgage for hotel finance is typically 25% to 40% of the purchase price. That means you’ll generally need at least a 25% deposit, although this can vary depending on the type of hotel, the lender, and your overall financial profile.
Here’s how it usually breaks down:
- Standard Trading Hotels: For profitable, operational hotels with good accounts or a strong lease, lenders may offer up to 75% Loan to Value (LTV)—meaning a 25% down payment is required.
- Closed or Underperforming Hotels: If the hotel isn’t trading or shows limited profitability, lenders might base the loan on a bricks and mortar valuation, with maximum LTVs of around 60–70%, requiring a 30–40% deposit.
- Experience Matters: Borrowers with at least 2 years of experience in the hospitality or commercial property sector may qualify for better terms and lower deposit requirements.
Working with expert hotel mortgage brokers ensures you’re matched with hotel mortgage lenders who understand your goals and can help reduce your upfront capital requirement where possible.
To buy a hotel using a commercial mortgage for hotel finance, you’ll typically need a deposit of 25% to 40% of the property’s purchase price. The exact amount depends on several factors, including the type of hotel, your experience, and the lender’s criteria.
Typical Deposit Requirements
- Trading Hotels (Profitable): Lenders may offer up to 75% Loan to Value (LTV), so you’ll need at least a 25% deposit.
- Closed or Unprofitable Hotels: These are higher-risk deals, so most lenders will reduce the LTV to 60–70%, meaning a 30–40% deposit is required, based on a bricks and mortar valuation rather than trading performance.
- Experience in the Sector: While not mandatory, having 2+ years of experience in the hotel or commercial property sector can lead to better terms and lower deposit requirements.
We work with specialist hotel mortgage lenders and hotel mortgage brokers who can help structure your deal to reduce the deposit burden where possible, especially if you have strong accounts, a solid lease in place, or are purchasing as part of a group or franchise.
Absolutely. Many investors and operators use limited companies or SPVs (Special Purpose Vehicles) to purchase hotels. Most hotel mortgage lenders support this structure, though lending terms may vary slightly depending on your company’s financials and trading history.
Hotel mortgages are commercial property loans used to finance the purchase, refinance, or renovation of hotel properties. They are typically assessed on business performance, occupancy rates, and borrower experience, rather than personal income alone.
To qualify for a hotel mortgage in South Wales, lenders usually look for relevant hospitality experience, a strong business plan, and a profitable trading history or viable projected income. Working with a broker like Mortgage Lane can strengthen your application.
Residential mortgages are based on personal income, whereas commercial hotel mortgages consider business revenue, operating costs, and industry experience. They are suited to both hotel operators and property investors.
Yes, Mortgage Lane is a specialist hotel mortgage broker in Wales, offering bespoke mortgage solutions for hotel acquisitions, refinancing, and development projects throughout the region and beyond.
Most hotel mortgage lenders require a deposit between 25% and 40% of the hotel’s value, depending on the risk profile, loan size, and borrower experience. Mortgage Lane can help source deals with flexible loan-to-value ratios.
Yes, you can refinance an existing hotel mortgage in Wales to reduce interest rates, raise capital, or restructure debt. Mortgage Lane offers refinancing support for hotel owners looking to improve terms or fund expansion.
No, commercial loans for hotel operators and investors are both available. Whether you run the hotel yourself or lease it to a brand or franchise, Mortgage Lane can match you with appropriate lenders.
It usually takes 4–12 weeks to arrange hotel mortgages in South Wales, depending on the complexity of the deal. Mortgage Lane streamlines the process to ensure faster approvals and efficient lender communication.
Hospitality mortgage finance is designed for businesses in the hospitality sector, including hotels, inns, and serviced accommodations. It’s ideal for those needing capital for purchase, refurbishment, or expansion
Mortgage Lane UK hotel finance solutions are trusted by hotel operators and investors nationwide. We bring specialist expertise, lender access, and personal service to every deal, making hotel financing by Mortgage Lane a smart choice for professionals in the hospitality sector.
The amount you can borrow to buy a hotel depends on several factors, but most hotel mortgage lenders will offer between 60% to 75% Loan to Value (LTV). That means if you’re purchasing a hotel worth £1 million, you could potentially borrow between £600,000 and £750,000, with the rest covered by your deposit or equity.
Key factors that influence how much you can borrow include:
- For Operators: Lenders assess the hotel’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) to ensure the business can afford the loan. Strong trading performance can lead to higher borrowing levels.
- For Investors: The loan size is often based on the rental income from the lease. A long-term, break-free lease with a strong tenant can support a higher valuation and borrowing limit.
- Experience: While not always required, having 2+ years of experience in the hospitality or commercial property sector can improve your chances of securing better rates and higher loan amounts.
- Valuation Type: If the hotel is closed or underperforming, lenders may only offer funding based on a bricks and mortar valuation, typically capped at around 70% of the 90-day market value.
We work with specialist hotel mortgage lenders who can assess your circumstances and connect you with lenders offering the most suitable commercial mortgage for hotel purchases.
Financing a hotel typically involves using a commercial mortgage for hotel purchase, but there are several options depending on your situation, whether you’re an operator or investor. Here’s a breakdown of how to finance a hotel:
1. Commercial Mortgage for Hotel Purchase
This is the most common route. You’ll need to provide a 25–40% deposit, and the lender will fund the rest based on:
- The hotel’s profitability (for operators)
- The lease strength and tenant (for investors)
- Your experience in the sector
- A satisfactory valuation of the property
2. Bridging Finance (Short-Term Loans)
If you’re buying a closed or underperforming hotel, you might use a bridging loan to fund the purchase and refurbishment, then refinance with a long-term hotel mortgage once trading resumes.
3. Development Finance
If you’re building a new hotel or converting an existing building, development finance can cover construction costs. This is typically interest-only during the build, then replaced with a commercial mortgage upon completion.
4. Equity or Joint Ventures
Some investors choose to raise funds by partnering with others, pooling capital to reduce personal outlay. Lenders often prefer applicants who show they have “skin in the game.”
5. Business Loans or Mezzanine Finance
In some cases, you might supplement a mortgage with a business loan or mezzanine finance to reduce the deposit requirement or support operational costs.
Working with experienced hotel mortgage brokers ensures you get access to the full market, including lenders who understand the unique aspects of hotel lending, from seasonal cash flow to franchise agreements. The right structure will depend on your goals, whether you plan to trade the business or lease it out, and how much capital you have to invest.
Yes, you can absolutely get a mortgage to buy a hotel, through what’s known as a commercial mortgage for hotel purchase. Whether you’re an experienced hotel operator or a first-time investor, there are specialist hotel mortgage lenders who provide funding tailored to the hospitality sector.
You may qualify for a hotel mortgage if:
- You’re buying a trading hotel with strong financials (for operators)
- The hotel has a long-term lease in place with a recognised tenant (for investors)
- You can provide a deposit of 25% to 40%
- You can meet the lender’s affordability checks (based on EBITDA or rental income)
- You have some sector experience – not always essential, but 2+ years can improve terms
Working with expert hotel mortgage brokers gives you access to lenders who understand the nuances of hotel financing, including seasonal income, operational risks, and valuation methods. Whether you’re buying your first boutique hotel or expanding a portfolio, we can help you secure the right funding.
Most hotel commercial mortgages run from 5 to 25 years, depending on the lender and your long-term plans. Shorter terms may be used for refinancing or bridging to a sale, while longer terms offer lower monthly repayments and are ideal for trading or investment hotels.
Hotel mortgage lenders in the UK include high-street banks, specialist commercial lenders, and private financiers. Mortgage Lane works with a broad panel of hotel mortgage lenders to secure competitive terms tailored to each client’s situation.
Absolutely. Mortgage Lane specialises in helping clients buy a hotel with a mortgage, guiding you from initial consultation through to completion, and securing tailored finance options from trusted hotel mortgage lenders.
Yes, Mortgage Lane provides expert hotel mortgage advice from our base in Newport, Wales. We assist local clients and businesses throughout South Wales and across the UK.
Yes, first-time hotel buyers can secure hotel finance in South Wales, though lenders may require a detailed business plan and sometimes a higher deposit. Mortgage Lane helps structure deals that make sense for new entrants to the sector.
Hotel investment finance is typically based on lease strength and rental income, whereas operational hotel finance is based on trading accounts, EBITDA, and occupancy performance. Mortgage Lane helps both investor and operator clients find suitable funding.
Hotel property loans in the UK can be used for boutique hotels, budget chains, guesthouses, B&Bs, and even serviced apartments if run as a business. Lenders assess property use and licensing status.
Interest rates for hotel finance in the UK vary based on the lender, risk profile, and loan structure. Typically, rates start from 3.5% for low-risk deals, with higher rates for more complex or startup ventures.
While more challenging, it is possible to get finance to buy a hotel with poor credit, especially with strong trading performance or a solid business plan. Mortgage Lane works with specialist lenders open to adverse credit cases.
Hotel acquisition finance is used to fund the purchase of a hotel property. It’s needed when acquiring an existing hotel business or asset and often includes both the property value and goodwill in the transaction