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COMMERCIAL MORTGAGES
What are commercial mortgages?
A commercial mortgage is a long-term loan used to purchase or refinance land or property intended for business or investment purposes. Unlike a residential mortgage, which is for a home you live in, a commercial mortgage is secured against non-residential property such as offices, warehouses, or retail units.
What are semi-commercial mortgages?
A semi-commercial mortgage is a specialised loan for properties combining residential and commercial use, for example, a shop with a flat above. They are ideal for investors or business owners looking to secure mixed-use assets with two income streams.
There are usually two types of clients who will look to apply for a commercial mortgage: -
An owner-occupier –
a client, who is looking to purchase a commercial property to run their own business from
A commercial investor –
a client, who is looking to purchase a commercial property, which they will then lease to a different business
What may you need to apply for a commercial mortgage?
To be able to apply successfully for a commercial mortgage, a lender may ask you to supply the following documents (note that this is not an exhaustive list): -
Recent business / personal bank statements
(Usually the last 3 months) – owner occupier
Tax Returns
(Usually the last 3 years) – owner occupier.
Performance figures
3 years’ worth of company accounts – owner occupier.
Commercial / proposed commercial lease
Commercial investor.
What are commercial mortgage terms?
Terms can vary depending on the lender. Typically, terms up to 25 years are available but some lenders can limit the term to 15 years.
How much is a deposit for a commercial mortgage?
The deposit required can vary depending on the lender and circumstances of the borrower and property type. Typically, 25% to 30% will be required.
Commercial mortgage rates?
The rate available will depend on many factors including the property type, loan to value required, credit profile, client property investment experience and business type. Rates are typically higher than residential mortgages.