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Commercial Mortgages

What is a commercial mortgage?  

It is a long-term loan secured against a commercial property. Whether you are an owner-occupier or a landlord, mortgages can be raised against all types of property. Lenders will have a maximum Loan to Value which they are willing to lend against a certain property type/ sector, but often it is the rental income which can dictate the maximum loan amount available, given the rent will usually be used to pay the monthly mortgage payments. The lending criteria and the lenders assessment of affordability can vary depending upon whether the property is occupied by your business, or a third party pays you rent.

What can a commercial mortgage be used for?

You want to purchase your own trading premises:

You may be renting a premises from a third party and have the opportunity to purchase it outright or you may well be operating out of a premises that you have outgrown and therefore need to purchase something bigger. A commercial mortgage can help spread the cost of the purchase over a long period of time.

You want to purchase a commercial property as an investment:

Commercial mortgages can also be used to purchase Investment properties which are/ can be let out to third parties We have helped finance properties such as Offices, Warehouses, Hotels, Holiday lets, Nursing Homes, Restaurants, Mixed-use (Commercial properties with flats above), Blocks of flats, HMO’s (Houses in multiple occupation) and student accommodation., Almost any type of property can be purchased using a commercial mortgage as long as it generates an income, or your business can trade from it.

You want to release cash tied up in a property:

You may be looking to expand your business, fund a project or simply looking to refurbish a property. We can help you unlock the equity within a commercial property, providing you with the cash and spreading the cost over a longer period

You are unhappy with your current deal:

As commercial mortgages are taken over a long period of time, more competitive or appropriate mortgage products might appear during that time. We can research the market for you and if suitable help you refinance your loan.

We were recently able to help one of our clients come out of a fixed rate commercial mortgage with an interest rate of 9.9% per annum, and move them to another lender who not only reduced the rate to 4.39% but also provided a further £50,000.00 to expand their business premises.

How do Commercial Mortgages Work?

A mortgage lender will take a charge over the property as their security, and will provide funds for purchase or refinance, perhaps to reinvest into your business to help growth plans.

What are the key considerations with Commercial mortgages?

Essentially your business needs to be able to afford the monthly mortgage repayments from business turnover or profits after dividends, drawings and day to day living expenses, or the rental income needs to be sufficient enough to provide a buffer when a higher “stressed” interest rate is applied.

There can also be minimum income requirements if you are a first-time landlord.

It is our job to take some of the confusion out of the myriad of Lenders, repayment options, affordability assessments, loan to value calculations etc. We do this by understanding you as an individual, what your circumstances are and what your overall objectives are.

What are the key Features of a Commercial Mortgage?

Up to 75% Loan to value

Interest Rates from 2.4 % Over Base Rate

Interest Only loans available, as well as Repayment mortgages.

Loan terms up to 30 years

Over payments and lump sum reductions allowed

So, whether you are a new Landlord, an experienced investor, a business looking to buy a trading premises or just looking to make your assets work harder for you, we have the sector knowledge and network of lenders to help you achieve your goals.

Frequently asked Questions

What rates would I expect to pay?

Commercial mortgage rates are calculated against the perceived risk. The lower the risk the lower the rate. For example, a commercial property let out to a strong tenant such as Tesco’s can expect to pay around 3% over base rate, and in contrast an applicant with adverse credit history, looking to borrow 75% of the property value can expect to pay anything up to 9% per annum. It is our job to find you the best deal possible for your circumstances

What Commercial Mortgage term lengths are available?

Term lengths from 2 years up to 30 years are available.

What Loan to Values are available?

The Loan to Value available varies massively dependent on the loan type (Interest Only or Repayment) and more importantly, serviceability. We have lenders on our panel who will happily lend up to 80% of the property value, and in some cases, we have been able to achieve 100% funding.

Can I get an Interest Only commercial mortgage?

Yes. We have several lenders on our panel who will lend on an interest only basis, usually over a period of up to 10 years

Can I buy investment properties with a commercial mortgage?

Yes. We are seeing an increase in the number of clients looking to buy investment properties. We can also help you build up a property portfolio utilising equity within your existing investment properties.

Is a commercial mortgage available for refinance?

Yes. You can refinance for various reasons, including the end of the term on your existing loan, or your circumstances may have changed for the better and you now want to take advantage and get a cheaper deal. We can also assist you with getting more money out your property at the point of refinance. This extra cash released can be used to buy further properties, or to invest into your business to help with expansion plans, or to fund your next project.

How do I apply?

The first step is a 5-minute telephone call where we will establish your requirements and collect sufficient information in order to present your case to the most suitable lenders, to obtain indicative terms. The options will be presented to you from the various lenders approached. We will then act as a liaison between you and the lender and will be on hand every step of the way until completion has taken place.

Other options within Mortgages

If you want a fast, flexible and reliable service, try
Positive Commercial Finance.


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