Commercial mortgages can be secured on any building or property not classed as a home. Each one is assessed individually by lenders, so the rate you’ll get isn’t usually published up front. Often there’s a minimum limit you can borrow as these types of mortgages are expensive to sort out.
How long can they be borrowed over?
Like a personal mortgage, commercial mortgages run for a maximum of 25 years, but can be shorter. Repayments are lower for longer terms but bear in mind there’ll be more interest to pay compared to shorter terms.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Are there any fees?
Yes. You’ll usually be charged:
- Arrangement fees range between 0.5%- 2% of the loan value. An arrangement fee is what you pay for the lender to set up your commercial mortgage. Arrangement fees vary significantly. You can usually choose between paying the arrangement fee upfront and adding it to the mortgage. Ultimately, though, it will cost more to do the latter as you will pay interest on it.
- Valuation fees. Likely to add about £500 to your loan. A substantial report is usually written first by a valuer.
- Legal fees – the borrower usually pays their own and the lender’s legal fees.
Some lenders might not charge all these fees for all customers.
Is a deposit needed?
Yes. Deposits are usually much larger than for residential mortgages. Typically, commercial mortgages will lend you around 70% of the property’s value. Additional security is not normally asked for on top of the property as the mortgage will be secured on the premises.
Commercial mortgages are not part of our offering, however, we have links to experts in this field and will help you on a referral basis. Please complete the pop-up form on the right of this page. If you prefer to use the phone, call us on 01244 47010 . Alternatively, you can send an email to: email@example.com if you prefer.
Commercial Mortgages are not regulated by the Financial Conduct Authority
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