Interest Rates: stick, track or twist?

Roughly every 6 weeks, there is baited breath as another interest rate announcement is made by the Bank of England.  As with residential mortgages, the costs of commercial mortgages are the highest they have been in years.  There is an entire generation that is used to being able to borrow around the 1% mark or sometimes even lower.  These borrowers are undoubtedly asking when will things return to normal.

For those of us old enough, we remember interest rates much higher than they are now and despite being lulled into a false sense of security by years of low interest rates, we know that the sub-1% interest rate is not normal.  It may be a few months more before interest rates start to show signs of coming down.  There are still hawks on the monetary policy committee calling for more rises.

Unless there are more signs of inflation falling, we are unlikely to see interests rates fall by any great amount in the immediate future.  It is, however, highly unlikely they will drop to anything like the levels of 2019.

There is always an element of risk with borrowing that interest rates may rise but hopefully with the encouraging signs of inflation coming down over the last few months, it is (hopefully) unlikely interest rates will rise much further and indeed that into the spring, we may even see interest rates starting to come down.

Even without interest rates falling, we are seeing lenders bring their own product rates down.  After a year of poor lending, many lenders are keen to do business this year.  Sometimes offering what may be an attractive rate now, but fixed over a longer period – hedging their bets that rates will come down and they will make money in the long term.

It is always worth keeping commercial mortgages under review.  Know exactly what your interest rate is, what the term of the loan is and any early repayment charge.  As product rates start to come down you may then want to switch products to a lower rate, but beware being fixed into longer terms.  This would be betting against interest rates falling in that period.

When looking to re-finance commercial properties, you should also bear in mind the associated costs – the product arrangement fees, sometimes the upfront interest payment or requirement for a deposit account, valuers fees and the legal fees (both for the lender and for you).  Add this to an early repayment charge and you need to be certain you will be better off in the long run.

To discuss this or any other related matter, please call Tamzin, start a live chat or email us at

*This is not legal advice; it is intended to provide information of general interest about current legal issues.


Tamzin Mandelli

Partner, Commercial Property

Prior to joining Hart Brown, Tamzin had worked for a local authority and for both regional and national firms. Tamzin is a Partner with over...

Partner, Commercial Property

Tamzin Mandelli

Prior to joining Hart Brown, Tamzin had worked for a local authority and for both regional and national firms.

Tamzin is a Partner with over 23 years' experience and she is based at our Woking office. Tamzin specialises in all aspects of commercial property including the sale and purchase of shops, offices and restaurants, landlord and tenant matters (from granting the new lease, through to the various licences for works, transfers and so on) and dealing with the eventual termination of a lease. She is also experienced at dealing with development work including option agreements and acquisitions.

Hart Brown is recognised in the Legal 500 2024 edition for real estate work in the South East and the entry states “With substantial experience in sales and purchases of properties, landlord and tenant matters and development agreements, Tamzin Mandelli 'provides a high level of service’ and ‘is able to deliver what is needed’.”

What do Tamzin's clients say about her?

"We have just worked on a commercial transaction together, which was by far the most challenging case I have dealt with (for a variety of reasons). Tamzin was extremely efficient and salvaged the transaction multiple times... I highly recommend her!"

“Thank you very much for all of your help and support. It has been an absolute pleasure working with you and hope to do so again in the future!”

"...thank you for your support with X, it's been good fun. Wish you were handling a commercial purchase for me! … lesson learnt, will place with you next time!"

“The service I received was efficient, professional and the members I dealt with both past and present have been helpful…and very personable.”