Care Home Mortgage

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• Instantly search live commercial mortgages from lenders across the UK
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• Avoid wasting time chasing the wrong loan with our eligibility criteria filters
• Ultra-fast search process speeds up completion times

Can you get a business loan to open a care home?

Looking to buy or grow a care home? You’ll likely need a commercial mortgage. This is a specialist commercial loan designed for purchasing, expanding or refinancing care homes, nursing homes, or supported living facilities.

But unlike a standard commercial mortgage, this isn’t just about bricks and mortar. Care homes are complex, regulated businesses with strict compliance requirements and operational risks. That means lenders take a much closer look, especially at factors like Care Quality Commission (CQC) ratings, management experience and sustainability of income.

Whether you’re acquiring your first home or scaling an established group, here’s what you need to know to get funded.

How do care home mortgages work?

Care home mortgages are a flexible type of commercial finance that can support a wide range of business goals, from acquisitions to refurbishments.

• Buying an existing care home: One of the most common uses. With income from day one and an established CQC rating, these deals often appeal to both lenders and investors.
• Expanding or acquiring new sites: With growing demand for care services, many operators are scaling. Mortgages can fund second sites or facility extensions — including new wings or specialist units.
• Refurbishing or modernising: Keep up with changing regulations and improve resident experience with upgrades like ensuite bathrooms, better accessibility, or fire safety systems.
• Refinancing: Reduce repayments, release equity or switch to a better rate to improve cash flow or reinvest in the business.

Eligible property types include:

• Residential care homes (including dementia and supported living)
• Nursing homes with 24/7 medical care
• Specialist homes for children or adults with complex needs

Each of these care home types may carry different risk profiles and regulatory obligations, which lenders will factor into their decision-making. You should always speak to a broker to help you decide the best course of action for your circumstances. You can find a deal that works for you with a Brickflow-trusted broker here. 

Is owning a care home profitable? 

Care home mortgages follow a similar structure to other commercial loans but involve more detailed underwriting due to the sector’s complexity and risk. Lenders assess not just the property, but the strength of the business behind it.

Typical loan features include:

• Terms from 5 to 25 years
• Interest-only or capital repayment options
• Balloon payments may apply at the end of interest-only periods
• Fixed, variable, or tracker interest rates

Lenders take a holistic view — looking at the operator’s track record, financial health, and regulatory compliance. Rising costs across the sector also impact how lenders evaluate risk.

According to Which?, weekly care fees now average £800–£1,000, rising to £1,400+ in some areas. Inflation, staffing shortages, and energy costs all contribute, making financial planning and accurate forecasting essential.

Additionally, a recent report from Knight Frank noted that care home bed numbers have been declining while demand continues to rise, creating clear opportunities for new entrants and expansion. The report also found that homes with 60 to 99 beds are the most profitable, operating at margins of 29%, making this size band particularly attractive for investors and developers.

Who can apply for a care home mortgage?

All care home owners must be registered as a 'care provider' with the CQC, which means you must demonstrate the experience and skills required to run a care home, as well as having an appointed care manager registered with the CQC.

Lenders have specific borrower profiles in mind when offering care home mortgages:

• Existing care home operators looking to expand or refinance
• First-time buyers with relevant sector experience (e.g. nursing, social care management)
• Property investors partnering with experienced operators or management teams
• Franchisees of existing care home groups
• Limited companies, LLPs and partnerships seeking to acquire care assets

The key factor is usually a strong operational track record, or a plan to bring experienced people into the business.

Regulatory and operational considerations 

Owning and operating a care home means navigating a highly regulated environment.

Compliance requirements include:

• CQC registration: Mandatory in England before operating. Ensures safety, care quality, and governance standards. Other regulators include Care Inspectorate (Scotland), Care Inspectorate Wales, and RQIA (Northern Ireland).
• Staffing Standards: Homes must meet regulated staff-to-resident ratios (e.g. 1:6 for residential care, 1:3 or 1:4 for nursing homes), with qualified nursing staff where required. All staff need DBS checks and safeguarding training.
• Health & Safety Compliance: Strict rules cover fire safety, infection control, medicines management, and safeguarding vulnerable adults.
• Ongoing Inspections: CQC inspects homes regularly, rating them from Outstanding to Inadequate across five areas. Poor ratings can affect referrals, funding, and occupancy.

Staying compliant isn’t just about ticking boxes — it’s key to building trust, securing finance, and ensuring long-term success.

Because of this, lenders will scrutinise your:

Given the complexity of the sector, lenders assess much more than just the property. They’ll closely examine the operational and financial strength of the care home business.

Key factors include:

• Track record: Previous experience running or working in care homes is highly valuable.
• CQC ratings: Strong ratings improve lending prospects; poor scores can be a red flag.
• Funding mix: Homes with more private-pay residents are typically more profitable and less reliant on lower-paying local authority contracts.
• Staffing model: Lenders expect sustainable staff-to-resident ratios (e.g. 1:5 for residential, 1:3 for nursing) and evidence of recruitment and retention strategies.
• Pricing strategy: Your fees should reflect quality, local demand, and leave room for a healthy profit margin.
• Occupancy forecasts: Lenders look for realistic projections, usually with 85%+ occupancy for financial stability.
• Cost controls: Demonstrating efficient management of costs like staffing, energy, and insurance is key to strong margins. Knight Frank reports that homes with 60–99 beds often operate at ~29% margins — a solid benchmark.
• Specialisms: Providing specialist care (e.g. dementia or palliative care) can support higher fees and stronger demand, making your case more attractive.

Source: Knight Frank – UK Healthcare Development Opportunities 2024 (for margin data and market insights).

Care home mortgage eligibility criteria and what lenders look for 

To assess your suitability for a care home mortgage, lenders will usually evaluate some key criteria. Navigating these requirements can seem complex, but with Brickflow, the process is streamlined, bringing all the lender options into one place and helping you prepare and present the right information from the start. Here’s what lenders are looking for:

• Deposit: Usually 25% to 40% of the property value. A higher deposit can improve your terms and open up access to more lenders.
• Loan-to-Value (LTV): Generally capped at 60–75%, depending on the strength of the deal and your experience in the sector.
• Experience: Lenders favour borrowers with a proven track record in care home operations. First-time buyers can strengthen their position by partnering with experienced operators or investors through joint ventures or co-investment deals.
• Cash flow forecasting: You’ll need to show that projected income comfortably covers operating costs and loan repayments. Brickflow helps by matching you with lenders aligned to your financial profile.
• Trading history: For existing operators, 2–3 years of audited accounts are often required. This demonstrates business stability and ability to service the debt.
• CQC rating: A current rating of “Good” or “Outstanding” from the Care Quality Commission can significantly improve your chances of securing favourable loan terms.
• Valuation report: A professional valuation should cover the property’s condition, current occupancy, fee levels, and its potential for future revenue growth. Note that not all valuers will be qualified for this asset class. 

Brickflow simplifies the application journey by helping you compare lenders based on these criteria in minutes, not weeks. Once your details are uploaded, you can re-use your application data to approach multiple lenders with no repetition or delays. You can start comparing lenders with Brickflow today. 

Care home mortgage interest rates, costs and fees

Care home mortgages come with a range of rates, fees, and ongoing costs that reflect the complexity and risk of the sector. Understanding these financial commitments is key to planning a successful acquisition or expansion.

Typical rates:

• Interest rates: Between 5.5% and 9% per annum, depending on risk profile, operator experience, and care type
• Loan size: Can range from £250,000 to over £10 million
• LTV: Usually 60–75%

Costs and fees:

• Arrangement fees: 1–2% of the loan amount
• Broker fees: May apply depending on broker structure
• Valuation fees: For assessing the property’s market value.
• Legal fees: Covering contract preparation and review.

Once you've secured a care home mortgage, it’s important to budget for the ongoing operational and regulatory costs that come with running a compliant, high-quality facility. These include:

• Property insurance:
  Expect to pay £5,000–£15,000+ per year, depending on the size of the property, location, number of residents, and level of cover. Premiums are typically higher for care homes due to 24/7 occupancy and medical care risk factors.
• Compliance upgrades:
  Costs vary depending on the nature of the update. Budget around £5,000–£30,000+ per year for upgrades such as fire alarm systems, accessibility improvements, or infection control measures. Requirements can shift with evolving CQC standards and legislation, so annual reviews are advisable.
• Maintenance and repair:
  General maintenance and responsive repairs usually cost between £1,000–£2,500 per bed per year. This includes everything from plumbing and electrical issues to wear and tear on shared spaces and bedrooms. For a 40-bed home, annual maintenance could be £40,000–£100,000.
• CQC inspection costs (indirect):
  While inspections themselves are free, associated costs can be significant. Preparing for an inspection or implementing post-report improvements may range from £5,000–£50,000, especially if additional staff, training, or refurbishments are needed to maintain or improve ratings.

These costs can all impact cash flow and borrowing capacity, so it’s important to factor them in when planning your finances.

How to apply for a care home mortgage 

Securing finance for a care home can be complex — but Brickflow makes the process faster, easier, and more transparent. Whether you’re a first-time operator or an experienced investor, our platform helps you access the right lenders and move from search to completion with confidence.

Step-by-step application process:

1. Initial assessment
   Use Brickflow to check your eligibility in minutes. You can search the market yourself or connect with an experienced broker from our network.
2. Document preparation
   Gather key documents including financial accounts, business plans, CQC ratings, and occupancy data. Your broker can guide you on what’s required.
3. Lender match
   Brickflow matches you with lenders based on your business profile, loan size, experience level, and care home type. No guesswork — just smart, data-led recommendations.
4. Valuation
   A qualified surveyor carries out an independent valuation of the property and business. Brickflow helps manage this process via the broker or lender
5. Underwriting
   The lender reviews your financials, regulatory compliance, staffing model, and cash flow forecasts. Our digital tools help speed up this stage by delivering clean, structured deal information.
6. Mortgage offer
   If approved, you’ll receive a formal offer outlining the loan amount, term, interest rate, and conditions.
7. Legal process
   Solicitors carry out due diligence. If you don’t already have one, your broker or Brickflow partner can refer you to a care sector specialist.
8. Completion
   Once all checks are complete, funds are released and your loan begins. Brickflow keeps everything streamlined, so there are fewer delays and more clarity.

You can read more about the application process for a commercial loan in our guide to commercial mortgages. 

Key documents include:

• Latest 2–3 years of business accounts
• 12-month cash flow forecast
• Business plan including occupancy strategy
• Proof of care experience
• CQC registration and ratings
• ID and company structure documentation

Tips for improving your chances of approval

Lenders want to feel confident that you can run a compliant, financially viable care home.

Here's how to boost your chances:

• Show relevant experience: Lenders usually expect at least 2–3 years of direct experience in the care sector, whether as a care home owner or in a senior role (e.g. Registered Manager or Director). New to the sector? Partnering with an experienced operator or hiring a proven management team can strengthen your case.
• Build a strong business plan: This should cover projected occupancy rates (aim for at least 85% to be conservative), local market demand (such as ageing population data or shortage of beds), pricing strategy (private vs local authority fees), and a clear USP (e.g. specialist dementia care, premium facilities, or culturally specific services).
• Forecast conservatively: Don’t overestimate income. While private pay residents offer higher margins, they’re less predictable. Stress-test your model for slower occupancy growth or staffing challenges.
• Secure a larger deposit: Lenders tend to be more comfortable if you’re putting in 30–40% of the property’s value. This reduces their risk and can help you secure better rates or terms.
• Highlight CQC performance: If you're acquiring an existing home, lenders will review its most recent Care Quality Commission (CQC) reports. Homes rated ‘Good’ or ‘Outstanding’ are more attractive from a funding perspective. For new operators, aligning your plan with CQC best practice is key.
• Work with a specialist: Brickflow connects you with experienced brokers who understand the care home sector and know which lenders are best suited to your deal. Our tech simplifies the process, helping you compare and apply for care home finance more easily.

Alternative funding options

If a care home mortgage isn’t the right fit, there are other ways to finance your plans:

• Bridging loans: ideal for short-term funding needs, such as purchasing a care home quickly before long-term finance is arranged, or acquiring a property in need of urgent improvement. They’re also commonly used for turnaround projects, where the operator plans to enhance performance before refinancing onto a standard mortgage. There are specialist lenders who will support this type of funding. Find a bridging loan for your project today.
• Development finance: Designed for ground-up construction or heavy refurbishment projects. If you're building a new care facility or significantly upgrading an existing one (e.g. adding en-suite rooms or expanding capacity), development finance offers staged drawdowns and interest roll-up to support the build phase.
• Refinancing:  If you already own a care home, refinancing an existing mortgage can help improve cash flow, reduce monthly repayments, or release equity for reinvestment in upgrades or expansion. This can be a strategic move, especially as care home values rise with improved occupancy or CQC ratings.

Each funding route comes with its own terms, eligibility requirements, and risks, so it’s essential to choose the right one for your situation. Working with a specialist platform like Brickflow can help you compare products and find the most cost-effective and suitable finance solution.

Finding the right care home mortgage for your business

Securing a care home mortgage can open the door to a stable, long-term investment in one of the UK’s most essential sectors. Whether you're expanding an existing business or launching a new one, the key is preparation; strong financials, deep sector experience, and a compliance-first mindset.

Use Brickflow to compare loans from care home mortgage lenders, access tailored advice, and improve your chances of securing the best deal.