Lendus.

Commercial Mortgages for Care Homes

Care home finance requires lenders who understand the regulatory environment, the role of CQC registration, and the operational complexity of the sector. We connect buyers and operators with specialist healthcare property lenders.

200+ UK lenders
2-minute application
No credit check to apply
FCA-regulated brokers

Rates

5.0% – 8.0%

per annum

Term

5-20 years

Max LTV

Up to 70%

Amount

£500k – £20m

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Mortgage types available

Owner-Occupied

Rate
5.0% - 7.0%
Term
5-20 years
Max LTV
Up to 70%

Best for: Care home operators buying the property they manage — lenders underwrite on operational performance and CQC rating alongside property fundamentals

Investment

Rate
5.5% - 8.0%
Term
5-20 years
Max LTV
Up to 65%

Best for: Healthcare property investors acquiring care homes let to an operator under a long lease — CQC compliance of the operator is a key lending condition

Refinance

Rate
5.0% - 7.5%
Term
5-20 years
Max LTV
Up to 65%

Best for: Existing care home owners restructuring finance, releasing equity for expansion or refurbishment, or consolidating a portfolio of care assets

Key considerations

Eligibility requirements

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Market context

The UK care home sector provides approximately 450,000 registered care home beds across around 15,600 registered premises. The sector faces significant structural demand from an ageing population: the number of people aged 85 and over in the UK is projected to double to over 3.5 million by 2045. Staffing shortages and cost inflation have been major pressures on operators in recent years, but fee income has risen substantially as local authorities have increased rates and the self-pay market has grown. Investment appetite for quality care home assets — particularly those with a 'Good' or 'Outstanding' CQC rating and strong occupancy — remains robust, with specialist healthcare REITs and private equity active alongside traditional commercial lenders.

Frequently asked questions

What role does the CQC rating play in a care home mortgage application?
The CQC rating is fundamental. Lenders treat it as a proxy for operational quality and regulatory compliance risk. A 'Good' or 'Outstanding' rating from the Care Quality Commission will give access to the widest range of lenders and most competitive rates. A 'Requires Improvement' rating will significantly restrict options and may require an action plan demonstrating remediation. An 'Inadequate' rating will typically prevent lending until the rating improves.
Can I get a mortgage on a care home that is being purchased as a going concern?
Yes — most care home purchases are structured as going concern transactions, where the business, CQC registration, staff, and goodwill transfer alongside the property. Lenders experienced in the healthcare sector are comfortable with this structure. The key is ensuring continuity of CQC registration, which requires the incoming operator to apply for a variation of registration before completion.
What occupancy level do lenders expect from a care home?
Most lenders look for a stabilised occupancy rate of at least 80%, with some requiring 85% before they will consider a standard commercial mortgage. Below this level, the business may struggle to cover debt service, and lenders may require a higher deposit or impose a higher rate to reflect the additional risk. A care home trading at 90%+ occupancy with a strong CQC rating is the most financeable asset in the sector.
Are there specialist care home lenders, or do high-street banks lend on them?
Both, but specialist healthcare lenders typically offer more competitive and appropriate products for care homes. High-street banks will consider care home lending but often apply generic commercial property criteria that do not reflect the sector's nuances. Specialist lenders — including several dedicated healthcare finance providers — understand CQC ratings, resident mix, fee structures, and staffing models, which leads to more accurate underwriting and faster decisions.
Can I use a commercial mortgage to build a new care home from scratch?
A standard commercial mortgage is not appropriate for a new-build care home, as there is no operating business or income at the outset. Development finance is the appropriate product for the construction phase. Once the building is complete, CQC registration obtained, and the home is trading at a stabilised occupancy level, it can be refinanced onto a commercial mortgage or sold to a healthcare property investor.

Related property types

Hotel HMO Mixed-Use

Guides and resources

What Is a Commercial Mortgage? Commercial Mortgage Rates Commercial Mortgage vs Bridging Best Commercial Mortgage Lenders

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