What is a commercial mortgage?
Commercial mortgages are for purchasing or re-mortgaging a property which is used for business purposes. This can either be for a business to trade from or as a commercial buy-to-let investment.
Commercial mortgages are available for a wide variety of land and property types:
- Retail, restaurants and cafes
- Factories & Industrial Units
- Care homes
- Development Land
- Multiple Occupancy Houses (HMO)
- Owner occupied business premises
- Buy-to-let business premises
These types of mortgages are provided by both high street banks and other specialist financial institutes.
Commercial mortgage figures
Typically the Loan to Value (LTV) for commercial mortgages is 65-70%. Deposits are usually in cash but can also include equity from other properties.
Interest rates for commercial mortgages vary based on the loan to value, property type, repayment terms, loan size and income cover.
- Commercial investment mortgages are for the purchase or remortgage of a commercial property which is then let to a third party. They can be secured against a wide range of business types.
- Semi-commercial investment mortgages can include residential living accommodation with a proportion of the property used for business purposes. The commercial part of the property may be the property owner’s business, or let out to another business.