How much can I borrow with a Commercial Mortgage?
Some commercial mortgage lenders may lend up to 75% of a property's value (LTV), although this depends on the property type, the strength of the deal and your individual circumstances. If the property will be occupied by your own business, affordability will usually be based on the business's income and profitability. If the property is being purchased as an investment, the amount you can borrow will typically be based on the expected rental or lease income.
How much deposit do I need for a Commercial Mortgage?
Most commercial mortgage lenders require a minimum deposit of around 25%, although this can vary depending on the property type and the strength of the application. Generally, the larger the deposit you can provide, the better the rates and terms available.
Can I get interest-only on a Commercial Mortgage?
Yes. Some commercial mortgage lenders offer interest-only options. However, you will usually need to demonstrate a suitable repayment strategy for repaying the balance at the end of the term.
What is the process for applying for a Commercial Mortgage?
- Initial enquiry and formal application
- Heads of terms issued
- Lender due diligence, including borrower checks and valuation
- Formal mortgage offer and acceptance
- Legal work and documentation
- Completion and release of funds
Do I need experience to apply for a Commercial Mortgage?
No. Some commercial mortgage lenders are willing to consider applicants with limited or no previous experience, depending on the overall strength of the deal.
What fees will I pay?
Commercial mortgage costs may include: an arrangement or facility fee (usually a percentage of the loan amount), a valuation fee, and legal fees. You will normally pay both your own legal costs and the lender's legal fees.
Can I get a Commercial Mortgage on a mixed-use property?
Yes. Some lenders offer semi-commercial mortgages for properties that combine residential and commercial use — for example, a shop with flats above on the same title.
FAQs
Do I need a broker to arrange a Commercial Mortgage?
No, but commercial mortgages can be more complex than standard residential lending. Many commercial lenders do not openly advertise criteria, so a broker can help identify suitable lenders and present the case correctly.
Are there early repayment charges on a Commercial Mortgage?
In many cases, yes. Commercial mortgages are generally longer-term finance solutions, so early repayment charges may apply during an initial fixed or tied-in period.
If you’d like to talk through your situation, call us on 01277 564 054 or send a message.
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