Semi-Commercial Mortgages
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A Semi-Commercial mortgage is a loan for a property that has both commercial and residential parts – typically the Society lends on properties such as a shop with a flat above. However, you can speak with us about any property with mixed use as long as 40% of the property is used for residential purposes.
Qualifying for a semi-commercial mortgage
To achieve the very best rates you will need to have either experience in running or letting a commercial property, or have owned more than one buy to let property for a minimum of two years.
If this is your first commercial investment, don’t panic. We have access to lenders which can help with this too, just expect rates to be slightly higher. Most lenders will require first-time commercial investors to own an additional property and have provable outside income.
We also have access to lenders which will consider applicants with adverse credit. If you do have any credit blips, please make sure you mention these to one of the team when applying.
We can help with:
- up to 5 satisfied CCJs within the last 3 years (value less than £10k)
- Missed payments (no missed secured loan repayments within the last 12 months)
- Bankruptcy / debt management plans (not within the last 3 years and must be discharged)
Semi-commercial mortgage rates
Semi-commercial mortgages are typically offered up to 75% loan to value. Although the mortgage would be semi-commercial, it’s still treated as a commercial mortgage. As a result, lenders will assess your business plan in relation to commercial space.
If you don’t plan to run a business from the property yourself, lenders will require a financial forecast of the potential rental returns that you aim to generate.
Typical mortgages rates for semi-commercial property include:
- Rates from 2.5% above bank rate
- Lender arrangement fees from 0.75% – 2% of the mortgage amount
- Mortgages terms from 2-30 years
- Repayment and interest-only options available
It is possible to obtain a higher LTV than 75% and in some cases a 100% mixed commercial and residential mortgage. This can only be done by offering security to the lender in the form of equity from another property or an existing business. This can be particularly useful when you have funds tied up in other ventures that are generating an income.
The nature of the building will also have an effect on the rates you’re offered. For instance, if you’re buying a pub, it’s likely you’ll need a 30% deposit at least.
