Commercial mortgages work in a very similar way to residential mortgages, but there are some differences that are worth noting:
- The rates are offered on a case-by-case basis
- Unlike residential mortgages, commercial mortgages are not regulated
So, what is a Commercial Mortgage?
Commercial mortgages, sometimes referred to as business mortgages, are mainly for business owners who are looking to buy property or land for commercial use.
What can you buy with a Commercial Mortgage?
Commercial Mortgages can be used to purchase a wide variety of of property types. This includes:
- Shops
- Office space
- Warehouses
- Factories
- Land for property development
- Semi-commercial properties
This is not the full list, there are plenty of other types of properties that are available to purchase with a commercial mortgage.
Is there a minimum deposit required?
Deposits for commercial properties tend to be higher than they are with residential properties, typically around 25-40%. In some cases, this can be higher, especially if your business is fairly new.
The type of business you run can also affect your deposit. Some lenders may ask for more money if they consider your business to be more ‘high risk’.
In some cases, it might be possible to get a higher loan-to-value (LTV), but this will depend on your business’s overall risk profile, the sector you’re operating in, market conditions and a number of other factors.
Obtaining a commercial mortgage is not as easy and straightforward, and this is why a specialist broker is extremely useful to you. Luckily for you, we have a team of specialist commercial brokers on hand to help you every step of the way.
PLEASE NOTE: Article written 14th November 2022. Information contained within this article is likely to change and therefore should not be relied upon or form part of any form of decision making without seeking professional advice. *
YOUR HOME MAY BE REPOSSESSED IF YOU DON’T KEEP UP REPAYMENTS ON YOUR MORTGAGE
Any guidance and/or advice contained within this document is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK. Any technical or regulatory information contained within this document was correct at the time of producing it but as it may be subject to change it should not be exclusively relied upon when making a financial decision. The Financial Conduct Authority does not regulate advice on Buy to Let mortgages.
Article written: November 2022 141122 MZ000259
