Buying or refinancing a care home is fundamentally different from any other type of property transaction. You are not just buying a building. You are acquiring a highly regulated, CQC-registered trading business where the value of the bricks and mortar is inextricably linked to the quality of the care provided and the strength of the management team.
Because of this dual nature, a standard commercial mortgage approach often falls short. Lenders in the healthcare space are looking for more than just a clean credit report. They want to see a sustainable operation that can balance high-quality resident outcomes with healthy EBITDA.
We position ourselves as your guide through this complexity. While you focus on CQC compliance and staffing ratios, you need a finance partner who understands how to package your case to secure the best possible terms.
What can be funded?
Care home finance is a versatile tool when placed in the right hands. We work with operators at every stage of the business lifecycle.
Purchase of existing trading care homes: the most common scenario. Lenders look for going-concern valuations where income is already proven.
First-time buyer acquisitions: many clients are experienced clinicians or senior managers stepping up to ownership. We have access to specialist healthcare lenders who value professional experience over previous ownership history.
Refinancing existing care homes: whether reducing monthly interest costs or moving away from a lender that no longer fits, refinancing can unlock significant cash flow.
Expansion funding: if your home is at capacity and you have space to extend, expansion funding can provide the capital for new wings or additional beds, increasing the value of the trading business.
Portfolio restructuring: for operators with multiple sites, we can help consolidate debt across a portfolio, often improving LTV ratios and repayment structures.
Development or conversion to care use: converting a former hotel or large residential property into a care home requires a specialist touch. We secure development finance that transitions into a long-term commercial mortgage once CQC registration is in place.
How care home mortgages are assessed
LTV and deposit expectations
Lenders typically offer between 60% and 75% LTV. Highly experienced operators with a strong track record can achieve 75%. First-time buyers should generally expect to provide a 30% to 35% deposit. This equity stake shows the lender you are committed to the long-term success of the home.
The valuation trinity: property, business and CQC
A healthcare valuer looks at three pillars to determine value:
· Property value: the bricks and mortar value, often assessed on a vacant possession basis.
· Trading performance (EBITDA): the investment value. Lenders apply a multiple to determine how much debt the business can service.
· CQC rating: Inadequate or Requires Improvement can be a deal-breaker. Good or Outstanding ratings open the door to the most competitive interest rates.
Management structure
Lenders want to see who is steering the ship. If the owner is hands-on, what happens if they fall ill? If there is a manager in place, what is their experience? A robust management structure reduces lender risk and often results in better loan terms.
Interest rates and personal guarantees
Care home finance rates are typically in the range of 3% to 6% over base rate or SONIA as an indicative guide, depending on the risk profile. Rates are subject to individual lender assessment. Expect to provide a personal guarantee, especially if the mortgage is held within a limited company structure.
Common challenges and why they happen
"The valuation came back lower than expected." This often happens when a valuer uses a residential bricks-and-mortar approach rather than an earnings-based approach. We make sure your valuer is a healthcare specialist.
"Lenders don't seem to fund nursing homes." Nursing homes have higher staffing costs and more complex regulatory requirements. Many generalist lenders shy away, but we know which specialist commercial lenders have an appetite for nursing and dementia care.
"I'm a first-time buyer getting declined." Without a previous track record of ownership, banks get nervous. We solve this by highlighting your clinical or management background as a mitigating factor.
The process: from strategy to completion
We keep the process straightforward so you can stay focused on your residents.
· Initial strategy call: we discuss your goals, your experience and the specific home you are looking at.
· Financial and trading review: we look at the last three years of accounts and the current CQC reports to build a Lender Pack.
· Lender matching: we target three to five lenders we know have an appetite for your specific case.
· Valuation and underwriting: once we have an agreement in principle, we manage the specialist healthcare valuation and the lender's formal underwriting.
· Completion: we work with your solicitors to ensure funds are released and the keys are handed over.
Why work with The Mortgage Consultancy
We have spent years building relationships with the key decision-makers at both high-street and specialist healthcare lenders. We know who is currently active and who has the appetite for specific types of care, whether elderly nursing, learning disabilities or mental health provision. Because we are not tied to any single bank, we offer truly independent advice with access to broker-only lenders that the public cannot reach.
Frequently asked questions
How much deposit do I need to buy a care home?
For most care home purchase deals you need a deposit of at least 30%. Some specialist lenders may consider 25% for highly experienced operators with significant additional security, but 30% is the standard benchmark for a sustainable loan.
Can I get a mortgage for a care home as a first-time buyer?
Yes, but you need to demonstrate relevant experience. Lenders rarely fund someone with no healthcare background. If you are a qualified nurse, doctor or experienced care home manager, we can often secure finance for your first acquisition.
What LTV do lenders offer for nursing homes?
LTV for nursing homes typically ranges from 60% to 70%. Because nursing homes have higher overheads and more complex medical requirements, lenders are often slightly more cautious than with standard residential care homes.
Do I need CQC registration before applying?
Not necessarily personally if you are buying an existing business, as the home will already be registered. The lender will make the transfer of registration a condition of the mortgage. For a conversion, the lender will want to see a clear roadmap toward CQC registration.
How are care homes valued?
Care homes are valued as trading businesses rather than residential property. The valuer looks at EBITDA and applies a multiple based on location, CQC rating and the physical state of the building. This is known as Existing Use Value.
Can I refinance an existing care home?
Yes. Many operators do this to release equity for expansion or to move away from high-interest bridge debt. Refinancing is a useful way to rebalance your balance sheet once the business is performing well.
How long does care home finance take?
Allow between three and five months. The process involves specialist valuations, CQC checks and complex legal work. Starting early and having your financial records in order is the best way to speed up the timeline.
Last updated: 10 May 2026