commercial mortgages

Commercial Mortgages | To buy or refinance a commercial property

Commercial Mortgages

Are you looking to buy or refinance a commercial property? Whether it’s to house your own business, expand into new premises, maximise your pension opportunities, or to rent out to another organisation, you may require a commercial mortgage. 

As commercial property mortgage specialists we are well placed to help you navigate the market, compare commercial mortgage rates and help you find the right deal that suits your individual business needs.

What is a commercial mortgage?

A commercial mortgage, also referred to as a business mortgage or a commercial property mortgage, is simply a loan that is secured on a property other than your residence.

They offer both fixed and variable interest rates, across a short or long term period, typically from 3 to 25 years.

A commercial property mortgage can be taken out against a wide range of properties including;

  • Offices
  • Warehouse and industrial units
  • Retail units
  • Pubs
  • Hotels

They can include buy to let mortgages, which are built for a high volume market. However, different premises can significantly vary in the risk that they would pose to a lender. For this reason, each application is assessed individually and priced to take account of the specific risk.

How do commercial mortgages work in practice?

In general, they are similar to a typical residential mortgage agreement, in terms of taking out a loan against the value of the property. 

They also commonly require a deposit and usually, the only security you need to provide is the property itself.

In seeking the right commercial mortgage for you, we will deal with a variety of lenders – including high street banks and secondary and third tier lenders.

Seeking a commercial mortgage with us allows you to benefit from:

  • Fixed and variable rates linked to Base rate or Libor
  • Amortisation periods potentially lasting up to 30 years
  • Periods of capital and interest repayment or interest only
  • Widely varying loan-to-value ratios. These can reach 100%, though they are typically 70%
  • Bank arrangement fees on top of the loan

Types of commercial Mortgages

Owner Occupied Mortgage

Commercial mortgages for owner occupiers are for trading businesses intending to use the property to run their business.

Residential Buy to Let Mortgage

A buy to let mortgage is for the purchase of a residential property to rent out to private individuals.

Commercial buy to let Mortgage

A commercial buy to let is also known and referred to as a buy to let mortgage for a limited company, with the purchase of residential property ultimately. 

A client would apply for a commercial mortgage if for instance it is a semi-commercial property (e.g shop with a flat above) or a full commercial property (eg warehouse).