Care Home Mortgage
A care home mortgage is a long-term commercial facility secured on a registered care home and underwritten primarily on the business's adjusted EBITDA and regulatory rating rather than on bricks-and-mortar value alone. Lenders advance up to 70% of market value — sometimes 60% for first-time operators — over 15 to 25 years at roughly 8% to 10.5% per annum, requiring debt service cover of 1.4x or better and a CQC rating of Good or above. Weak ratings, low occupancy or a heavy local-authority fee mix will not necessarily stop a deal, but they change which lender writes it and at what gearing.
Criteria and pricing
What lenders on our panel will typically do on this product today.
- Loan to value
- Up to 70%; 60% for first-time operators
- Rate
- ≈ 8% – 10.5% p.a.
- Term
- 15 – 25 years, capital repayment or part-and-part
- Debt service cover
- 1.4x adjusted EBITDA typically required
- Arrangement fee
- 1.5% – 2%
- Occupancy
- 85%+ preferred; lower accepted with a turnaround plan
- CQC rating
- Good or Outstanding for mainstream terms
- Loan size
- £500,000 – £25m
- Borrower
- Operating company plus propco, with personal guarantees
Worked example — 42-bed home, purchase
- Purchase price
- £3,600,000
- Loan at 65% LTV
- £2,340,000
- Rate over 20 years
- 8.75% p.a.
- Monthly payment (repayment)
- ≈ £20,700
- Adjusted EBITDA
- £520,000
- Debt service cover
- ≈ 2.1x
- Arrangement fee at 1.75%
- £40,950
- Equity required including costs
- ≈ £1,430,000
Figures are typical UK market ranges as at 2026 and are indicative only — your terms depend on the asset, the exit and the lender we place the case with.
Who this works for — and who it does not
You are likely to qualify if
- A registered home with two to three years of trading accounts, or a strong management team on a first acquisition
- CQC (or CIW / Care Inspectorate) rating of Good, or a credible improvement plan
- Adjusted EBITDA supporting 1.4x cover after a management charge
- Experienced registered manager in post or identified
- Deposit of 30%–40% of purchase price plus SDLT and professional costs
This is the wrong product if
- Homes in special measures with no funded turnaround plan
- Buyers with no care sector experience and no operator partner
- Purely speculative purchases with no registration route
- Closed homes requiring full refurbishment — that is bridging or development finance first
What actually happens, and when
- Week 1
Financial review
We normalise the accounts — owner's remuneration, agency spend, one-off costs — because the adjusted EBITDA figure drives the whole decision.
- Week 1–2
Lender selection and terms
Only a handful of lenders write care meaningfully; we go to those whose criteria match your rating, fee mix and experience.
- Week 3–6
Valuation and due diligence
Specialist healthcare valuation on a trading basis, plus regulatory and operational due diligence.
- Week 6–12
Offer and completion
Formal offer, legals and completion. Where the vendor needs speed, a bridge completes first and refinances onto the term facility.
Frequently asked
Request indicative terms
Four details are all a lender needs to price a case: how much, what secures it, when you need it and how it is repaid. Send those and we come back with realistic terms — or tell you plainly that the case will not place.
Request indicative terms
Share your funding amount, security, timing and repayment plan. A specialist will review the case and discuss suitable funding options, subject to lender assessment.