Commercial mortgages explained
A plain-English overview of UK commercial mortgages: how they are typically structured, common use cases, and what lenders usually assess.
What a commercial mortgage is
A commercial mortgage is a loan secured against non-residential property used for business purposes. It is used both by owner-occupiers purchasing their trading premises and by investors purchasing property to let commercially.
Typical structures
Terms commonly range from 5 to 25 years. Rates may be fixed or variable and are usually priced above a reference rate. Loan-to-value ratios typically sit between 60% and 75% depending on the asset and the borrower profile.
What lenders usually assess
Lenders generally look at the property, the borrower or borrowing entity, trading performance or rental coverage, and the deposit or equity available. Requirements vary between lenders and change over time.
Frequently asked questions
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