Commercial and semi-commercial mortgages are designed for a wide range of businesses and investment properties. Because every application is different, these mortgages are often tailored to your individual circumstances rather than following a standard lending process. Finding the right mortgage can be time-consuming because bespoke negotiations with lenders are often required.
Not all lenders offer commercial or semi-commercial mortgages and every lender has different criteria, so getting the right advice can make a significant difference. As your mortgage advisor, I can research the market, help you find a lender that’s the best fit for your investment goals and help you package your application correctly for the lender’s requirements.
What is a Commercial Mortgage?
A commercial mortgage is a loan used to buy, refinance or release equity from a property that is used primarily for business purposes. This could include offices, shops, warehouses, industrial units, hotels, pubs, care homes or other commercial premises.
Commercial mortgages are available to both businesses buying their own premises and property investors purchasing commercial buildings to rent out. Commercial mortgages can be used to purchase business premises, refinance an existing commercial mortgage or raise capital against a commercial property.
What is a Semi-Commercial Mortgage?
A semi-commercial mortgage is used to buy or refinance a property that has both residential and commercial elements. Common examples include a flat above a shop, a pub with owner’s accommodation, or a building with a business on the ground floor and residential accommodation above.
Because these properties don’t fit neatly into either residential or commercial lending, lender criteria can vary considerably. Lenders also apply their own parameters around the proportion of residential versus commercial space in the property to class it as semi-commercial rather than commercial. So it’s important to establish how a lender will classify your property before applying, as this can affect which lenders are available and the terms they offer.
How Does Financing Work?
Commercial and semi-commercial mortgage applications are much less standardised than residential mortgages. Every lender has its own appetite for different property types, businesses and borrowers, so the right lender for one client may not be the right lender for another.
If you’re buying premises for your own business, lenders will usually look at how affordable the repayments are based on the business’s income and financial position. If you’re buying an investment property, they’ll pay close attention to the rental income the property is expected to generate.
Most lenders will require a higher deposit than residential and buy-to-let properties, although the amount varies depending on the property, your experience, the business involved and the lender’s appetite for risk. Length of mortgage terms and repayment structures can vary depending on your business needs and the lender’s criteria.
Who Are These Mortgages For?
- Businesses buying their own premises
- Commercial property investors
- Buy-to-let investors expanding into mixed-use property
- Shop owners with flats above
- Landlords refinancing existing commercial properties
- Hotels, pubs, cafés and restaurants
- Care homes and specialist commercial properties
Ready for Next Steps?
Commercial and semi-commercial mortgage lending can be incredibly bespoke and tailored. Whether you’re buying, refinancing or reviewing an existing commercial/semi-commercial mortgage, I’ll help you understand your options and find a lender that’s the right fit for your business or investment goals.
If you’re ready to get started, let’s have a Quick Chat for an initial conversation or message me on Whatsapp. If you’re actively searching for a property and would like to discuss your detailed mortgage requirements, book a longer Specialty Appointment and we’ll go through your situation together.