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
Tell us the four things every lender asks first. We come back with realistic terms, usually the same working day.