Aparthotel finance: how we arrange debt against an extended-stay trade
We arrange aparthotel finance for operators and investors buying, refinancing or developing an extended-stay hotel. An aparthotel earns like a hotel but on longer stays and a leaner cost base, so a lender underwrites the operating model and the going-concern trade, not a fixed lease. This is commercial finance against the scheme and its income, not a regulated mortgage on a home.
Stabilising aparthotels
Aparthotel finance is the commercial lending that funds an aparthotel or serviced-apartment scheme through purchase, refinance or development. An aparthotel combines self-contained, furnished apartments with a hotel-style service layer and trades on longer average stays than a conventional hotel, which protects occupancy and margin. It is valued as a going concern on its fair maintainable trade and EBITDA, because a lender underwrites the operating model rather than a lease.
The economics turn on occupancy, achieved rate and the operating margin the extended-stay model preserves. Underlying serviced-apartment demand has compounded at about 5.9% a year since 2019, ahead of the wider hotel sector, with European serviced-apartment occupancy near 79% in 2025 (Savills). A lender sizes loan to value against going-concern value and tests the DSCR the maintainable trade supports, reading a freehold owner-occupier trade differently from a scheme held on a management agreement or let to a tenant.
Aparthotel deals run as a commercial mortgage for a purchase or refinance, a bridging loan to carry a newly opened scheme through its occupancy ramp before a term refinance, and development or conversion finance drawn against a monitoring surveyor where a scheme is being built or repositioned. Asset finance can fund the furniture, fixtures and equipment, and a VAT loan can bridge the reclaim on an opted purchase.
It remains an institutionalising niche. UK serviced-apartment transactions ran at about £660m across 2024 and 2025 combined, roughly 6% of hospitality investment, across a UK stock of around 29,500 apartments in 800 properties (Savills), with investor appetite up 22% into 2026 on short-let regulatory tightening and remote-work demand (Savills). Pricing sits a touch behind prime hotel yields of 4.50 to 4.75% (Knight Frank, October 2025) to reflect the thinner transactional market. We package the operating model and the trade so a lender can price the going-concern risk.
What we fund
- Freehold aparthotel purchases by an owner-operator or investor
- Refinancing a trading aparthotel onto keener term debt
- Newly opened schemes ramping extended-stay occupancy
- Conversion of a building to aparthotel or serviced-apartment use
- Management-agreement and operator-let aparthotel trades
- Repositioning a scheme to lift rate and occupancy
Indicative terms
- Loan to valueIndicative ~60 to 70% of going-concern value
- Basis of valuationGoing concern on the extended-stay trade (EBITDA)
- TermCommercial mortgage typically to 20 or 25 years
- Debt service coverSized on the DSCR the maintainable trade supports
- Ramp and developmentBridging or development finance where relevant
- Key testsOccupancy, rate, operator, extended-stay demand, tenure
- ExitTerm refinance once the trade is demonstrable, or sale
Indicative only. Terms vary by lender, asset and scheme and are not an offer of finance.
How we arrange aparthotel finance
We arrange aparthotel finance around the operating model and pre-agree the exit. For a purchase or refinance we place a commercial mortgage sized indicatively at around 60 to 70% of going-concern value, on a term typically to 20 or 25 years, amortised by the DSCR the fair maintainable trade supports. For a newly opened scheme we can arrange a short-dated bridging loan that carries it through the occupancy ramp before a term refinance. Where a scheme is being built or converted we arrange development finance drawn in stages against a monitoring surveyor, then a term take-out once the aparthotel opens and stabilises. Asset finance can fund the furniture, fixtures and equipment, and a VAT loan can bridge the reclaim on an opted purchase. We frame every figure as indicative and never as an offer or a quoted rate; the terms depend on the operator, the location and the trade, and we run the market accordingly.
How a lender underwrites an aparthotel
A lender underwrites an aparthotel on its operating model, not a fixed lease. It works to the fair maintainable trade the extended-stay income supports, reads occupancy, achieved rate and the operating margin the longer-stay model protects, and capitalises the EBITDA to a going-concern value. It sizes loan to value against that value and tests the DSCR, and it distinguishes a freehold owner-occupier trade from a scheme on a management agreement or let to a tenant. Because the sector is a smaller, less transactional market than mainstream hotels, some lenders price a touch behind prime hotel yields and lean on the operator's evidence. Specialist hospitality and serviced-apartment lenders, challenger banks and debt funds compete here. As an arranger with no exclusive tie, we present the operating model and the trade to the lenders most comfortable with extended-stay income.
Refinancing an aparthotel into institutional demand
Aparthotel finance is arranged with the exit in view. A bridging or development facility is repaid by a refinance onto a long-term commercial mortgage once the trade is demonstrable, or by a sale into the institutional capital now entering extended stay. UK serviced-apartment transactions ran at about £660m across 2024 and 2025 combined (Savills), a thin but institutionalising market, with investor appetite up 22% into 2026 (Savills). Pricing sits a little behind prime hotel yields of 4.50 to 4.75% (Knight Frank, October 2025) to reflect thinner liquidity. A demonstrable, well-operated trade converts a day-one position into a refinanceable going-concern value, and we structure the facility so that route out is credible from the day it is drawn.
Finance that suits this asset class
- Commercial mortgagesLong-term debt on a trading aparthotel, sized on going-concern value and DSCR.
- Development financeStaged funding for a new-build or converted aparthotel scheme.
- Bridging financeCarries a newly opened aparthotel through its occupancy ramp.
- RefinancingReplaces existing debt or releases equity from a proven trade.
- Asset financeFunds furniture, fixtures and equipment across the scheme.
Stabilising aparthotels?
A view on fundability within one working day.
What drives an aparthotel's numbers
An aparthotel earns like a hotel but trades on longer stays and a leaner cost base, so the economics turn on occupancy, achieved rate and the operating margin the extended-stay model protects. Underlying demand has compounded at about 5.9% a year since 2019, ahead of the wider hotel sector, with European serviced-apartment occupancy near 79% in 2025 (Savills). It remains an institutionalising niche: UK serviced-apartment transactions ran at about £660m across 2024 and 2025, roughly 6% of hospitality investment (Savills), with appetite rising on short-let regulatory tightening and remote-work demand. We model maintainable trade on the extended-stay income, because a lender underwrites the operating model and the going-concern value, not a fixed lease.
Indicative aparthotel finance and structures
Indicatively we arrange aparthotel commercial mortgages to around 60 to 70% of going-concern value, sized on the debt service cover the maintainable trade supports, with development or conversion finance drawn against a monitoring surveyor where the scheme is being built or repositioned. A short-dated bridge carries a newly opened aparthotel through its occupancy ramp before a term refinance. Pricing sits a touch behind prime hotel yields of 4.50 to 4.75% (Knight Frank, October 2025) to reflect the thinner transactional market. These are market-typical, indicative structures and never an offer or a quoted rate; the terms depend on the operator, the location and the trade, and we run the market accordingly.
Frequently asked questions
Can you get a mortgage for serviced accommodation?
Yes, but as commercial finance rather than a residential mortgage. An aparthotel or serviced-apartment scheme is financed on a commercial mortgage sized against going-concern value and the DSCR the extended-stay trade supports, typically to around 60 to 70% loan to value. The underwriting is on the operating model, occupancy and rate, not on an individual's personal income, and it is unregulated commercial lending against the scheme and its trade.
What is the definition of an aparthotel?
An aparthotel is a hotel made up of self-contained, furnished apartments with kitchen facilities, combined with a hotel-style service layer such as reception, cleaning and check-in. It caters to longer stays than a conventional hotel, which tends to protect occupancy and margin. From a finance view it is an operating asset valued as a going concern on its fair maintainable trade, which is how a lender sizes a loan against it.
Can you live in an aparthotel?
Guests can stay in an aparthotel for extended periods, which is the point of the model, but that is a residential and planning question for the operator rather than a finance one. What matters for funding is that the aparthotel trades as a business: a lender underwrites the extended-stay trade as a going concern and sizes the loan on the fair maintainable trade and the DSCR it supports, not on any individual occupier.
What is hotel financing?
Hotel financing is the commercial lending that funds the purchase, refinance, refurbishment or development of a hotel, underwritten against the trade as a going concern on its fair maintainable trade rather than against bricks and mortar. An aparthotel is financed on the same principle, with the underwriting focused on the extended-stay operating model. We arrange the commercial mortgage, bridging or development finance to suit the deal, as an arranger and not a lender.
How much can I borrow to buy an aparthotel?
Borrowing on an aparthotel is sized against going-concern value and the DSCR the extended-stay trade supports, with leverage indicatively around 60 to 70% of going-concern value, so the balance is funded as deposit and equity. A proven trade with strong occupancy on a freehold owner-occupier basis borrows more comfortably than a newly opened or thinly documented scheme. We frame leverage as indicative and never as an offer; lenders size it on the maintainable trade.
Is aparthotel finance different from hotel finance?
It works on the same going-concern principle but the underwriting reflects the extended-stay model: longer average stays, a leaner cost base and, often, a smaller and less transactional investment market. Some lenders therefore price a touch behind prime hotel yields and lean on the operator's evidence. We arrange the commercial mortgage, bridging or development finance and run the lenders most comfortable with extended-stay trade.
Stabilising aparthotels?
Tell us about the asset and the income plan and we will come back with a view on fundability and likely terms.