Commercial Mortgages

Commercial Mortgages for Owner-Occupiers and Investors

Securing the right commercial mortgage is a crucial step whether you're buying property for your business or as an investment. Understanding the different types of commercial mortgages can help you make the best decision for your needs. These mortgages generally fall into two categories: Owner-Occupier Commercial Mortgages and Commercial Investment Mortgages. Each serves a specific purpose and comes with unique benefits depending on how you plan to use the property.

Owner-Occupier Commercial Mortgages

If you’re looking to purchase a property for your business to operate from, an Owner-Occupier Commercial Mortgage is the ideal choice. These mortgages are tailored for businesses that plan to use the property as their main place of business.

Key Features:

• Usage: The property should primarily be used by your business, although you might have the option to rent out any unused space.
• Loan-to-Value (LTV): Typically, lenders offer 65-75% of the property’s value, requiring you to provide a 25-35% deposit. In some cases, a lower deposit might be possible, though it could result in higher costs. Additional assets may also be used as collateral to reduce the deposit required.
• Repayment Terms: Generally long-term, with repayment periods ranging from 5 to 30 years. You can choose between fixed or variable interest rates based on your preference.
• Repayment Type: Options include both Capital & Interest or Interest-Only repayment plan
• Eligibility: Lenders will assess your business’s financial health, including its credit history, profitability, and future plans.
• Semi-Commercial Properties: If part of the property is residential, like a shop with a flat above it, this is known as a semi-commercial property. Mortgages are available for these types of properties, though the terms may vary slightly.

Commercial Investment Mortgages

For those looking to purchase commercial property as an investment, a Commercial Investment Mortgage is designed to meet your needs. This type of mortgage is perfect if you intend to rent out the property to generate rental income.

Key Features:

• Usage: The property is rented out to tenants, generating income from the rental payments.
• Loan-to-Value (LTV): Similar to owner-occupier mortgages, LTV ratios are usually between 60-75%. In some cases, 100% financing might be possible if additional assets are offered as security.
• Repayment Terms: Generally long-term, with repayment periods ranging from 5 to 30 years. You can choose between fixed or variable interest rates based on your preference.
• Repayment Type: Options include both Capital & Interest or Interest-Only repayment plans.
• Eligibility: Lenders will evaluate the property’s potential rental income, the quality of the tenants, and your experience as a landlord or investor.
• Semi-Commercial Properties: Just like owner-occupier scenarios, these can include properties with both commercial and residential components. Lenders may consider the combined rental income from both parts when assessing your application.

Considerations for Both Types of Mortgages

• Interest Rates: Can be fixed, variable, or a combination of both. Fixed rates provide predictability, while variable rates can change with market conditions.  These mortgages may have slightly higher interest rates due to the associated risks, with terms ranging from 5 to 30 years.
• Fees: Expect costs such as arrangement fees, valuation fees, legal fees, and potentially early repayment charges.
• Personal Guarantees: Some lenders might require a personal guarantee from business owners, particularly for smaller or newer businesses.

Available for, but Not Limited to, the Following Business Sectors:

• Retail Units: Ideal for businesses looking to purchase shops, boutiques, or other retail spaces to sell products directly to consumers.
• Semi-Commercial Units: Combine both commercial and residential elements, such as a shop with a flat above it, making them a versatile choice for business owners and investors alike.
• Warehouses: Perfect for businesses needing storage or distribution space, from small storage units to large logistics hubs.
• Offices: Whether you need a small office for a startup or a large building for a growing company, we offer mortgages for all types of office spaces.
• Care Homes: Tailored mortgage options for those looking to invest in or operate care homes, which require specialized facilities to meet the needs of residents.
• GP/Dentist Practices: Specific mortgages for healthcare providers, including general practitioners, dentists, and other medical professionals looking to purchase or expand their practices.
• Hotels, Guest Houses, and B&Bs: Whether you're entering the hospitality industry or expanding an existing business, our mortgage options cater to a variety of accommodations, from boutique hotels to bed and breakfasts.
• Factories: For businesses in manufacturing and production, our mortgages support the purchase of industrial spaces that are essential to your operations.

Whether you're looking to purchase a property for your own business or as an investment, there are specific mortgage options available to suit your needs. The choice between an owner-occupier mortgage and an investment mortgage depends on how you plan to use the property. For properties that have both commercial and residential uses, semi-commercial mortgages offer a flexible solution, allowing you to finance properties that serve dual purposes.

Our specialist advisers are here to navigate the complex world of commercial finance for you. With access to a wide range of lenders, we'll search through the most suitable options to find the best deals available for your unique situation. Commercial finance is a vast and intricate field, with many different products to choose from, which is why having an experienced adviser by your side can save you a significant amount of time, frustration, and money—both now and in the future.

Take the first step towards securing the right commercial mortgage by contacting us today. We’ll arrange a consultation with one of our specialist advisers who will guide you through the process and help you find the best financial solution for your needs.