What is a retail mortgage?

The term retail mortgage is used in two ways. In property finance it means a commercial mortgage secured on retail property, such as a shop, parade or retail park. In banking it describes mortgages sold to individuals, such as home loans, as opposed to wholesale or business lending. The context usually makes clear which is meant.

This guide covers both meanings, starting with loans on shops and retail property, which is how the term is used when someone is buying or refinancing a retail unit. Retail property loans are generally unregulated business lending (FCA Handbook PERG 4.4, accessed 20 Oct 2026).

A mortgage on retail property is a commercial loan used to buy, refinance or release equity from a shop, retail unit, parade, shopping centre or retail park. It is repaid over an agreed term and secured on the property. Borrowers include retailers buying their own premises and investors buying let units.

Retailers who trade from the shop are assessed on their business accounts and cash flow. Investors are assessed on the lease, the tenant and how far the rent covers the interest. Location, footfall, the condition of the unit and the strength of the local retail market all affect the valuation and the loan.

How lenders treat shops, from corner shops to high street units, is explained in the retail and shop mortgages section, which covers owner-occupied and let property.

In banking, retail mortgage lending means mortgages provided to individual customers, mainly to buy or remortgage homes. Banks and building societies split their lending into retail, for individuals, and commercial or corporate, for businesses. Residential mortgages for homeowners are retail lending and are regulated by the FCA under its mortgage rules.

An example of a retail loan is a repayment mortgage taken by a household to buy its home, or a personal loan. These are different from commercial loans on shops, offices and other business property, which are usually made to companies and assessed on business income rather than personal earnings.

Loans on retail property fall into a few types. Owner-occupied mortgages fund shops a business trades from. Investment mortgages fund let units. Mixed-use loans cover shops with flats above. Short-term bridging funds quick purchases or vacant units, and development finance funds retail park building or the conversion of empty units.

Each type is assessed differently and has its own group of lenders. A retail park development, for example, is financed in stages as the work progresses, while a let high street shop with a long lease may be suitable for a standard investment mortgage. The choice depends on how the property will be used and how the loan will be repaid.

Pricing on retail property, and what moves it, is explained on the retail mortgage rates page, together with the fees that come with commercial loans.

Getting a mortgage on a shop follows the usual commercial steps. The borrower or a broker approaches lenders with details of the unit and the business or lease, and receives indicative terms. The lender instructs a commercial valuation and checks the borrower, then its solicitors review the title, lease and planning before a formal offer is made.

Commercial cases usually take longer than home loans, so gathering accounts, leases and planning documents early helps. Lenders also want evidence of the deposit and details of other borrowing. Purchase costs, such as Stamp Duty Land Tax on non-residential property and legal fees, come on top of the deposit.