Compare commercial mortgage rates from the leading lenders across the whole market.
The Role of a Commercial Mortgage Broker
We work with all the major banks and lenders you may well be familiar with. On top of this, we also offer products from many lenders who aren’t as well known.
We even offer direct applications to lenders who do not deal directly with the public if their products are the most suitable for you. This enables you to compare commercial mortgage rates from across the whole market, through one quick enquiry.
Using a Commercial Mortgage Broker
When looking at commercial mortgages, people are often torn as to whether they would be best approaching lenders directly, or working with a reputable broker.
Firstly, a reputable broker will offer you truly impartial advice. This means you will be able to secure the best possible deal and will have confidence in the advice you receive. An independent broker won’y have ties to a single lender’s products.
A broker will manage the process from start to finish, fully preparing your application before submission and fighting your corner when decisions are being made. This positive influence on negotiations can see you experiencing far less stress and could even save you money by preventing issues before they arrive.
Finding the right lender can be time-consuming in this complex market and, as such, a broker can save you a lot of time. This effect will be compounded when they manage large chunks of the process on your behalf once the right lender is found.
The flip-side to this is that many brokers will charge high fees on completion on the loan. In addition, not all brokers are as diligent in dealing with applications and can actually delay the process.
Commercial Mortgage Rates
We offer market leading terms for almost every situation:
- Rates from 2.25%
- No broker fees for loans over £100,000
- Borrow up to 80% Loan To Value (LTV)
- Fixed and variable rates available
- Interest only or capital repayment
Commercial Investment Mortgages
- Rates from 2.85%
- No broker fees for loans over £100,000
- Up to 75% LTV
- Commercial or mixed-use properties
- Borrow for up to 25 years
- Interest only or capital repayment
We offer a totally transparent service, providing expert advice and giving you the information you require to compare the latest rates and choose your own product.
Commercial Mortgage Example
A client is looking to purchase a high-quality office building and intended to relocate his profitable business to trade from the new building. This will allow the client to expand the business and increase profits further.
The building will cost £1,000,000 and he is looking to borrow 70% LTV (£700,000). The client is happy to take the mortgage on a capital repayment or interest only basis over 20 years and wants the lowest possible rate and is not concerned if this it is variable.
Depending on the strength of both the applicant and the business, we would be able to offer this over a term of 20 years on a capital repayment basis without a problem. The lowest rate available for the purposes of this example is 3% per annum, with a 1.5% lender arrangement fee.
The client has asked to add this fee to the loan to reduce his out of pocket expenses while moving the business. This leaves the loan looking like this:
|Arrangement Fee – 1.5%||£10,500.00|
|Loan with Fee Added||£710,500.00|
The monthly repayments when calculated on a capital repayment basis would be:
The client would also be obliged to pay legal costs and a valuation fee during the application process to progress the application to completion.
Monthly Repayments vs. Total Cost Of Credit
The chosen term will affect the total cost of borrowing the money. If the term is reduced, the monthly repayments will increase, but his total cost would reduce.
This would have to be offset against the affordability of the loan, as if the repayments are too high, they may place a strain on the finances of both the client and the business.
Assuming the interest rate remained the same during the life of the loan and all repayments were made on time, by changing the term, the total interest paid can change dramatically.
|Term Chosen||5 years||10 years||15 years||20 years||25 years|
|Total Interest (Life of the Loan)||£55,505.00||£112,776.80||£172,684.40||£235,200.80||£300,281.00|
As you can see from the above example, by reducing the term to 15 years from 20 years, the monthly payments increase by £966.16. The flip side to this is that the total interest charged reduced by £64,516.40 over the course of the loan.
It is important that the term of borrowing is considered carefully to ensure the right balance is reached for your individual circumstances.
Adverse Credit Commercial Mortgages
There are lenders in the market who will accept an application from you even if you have suffered adverse credit in the past. As the level of adverse credit suffered increases, however, fewer lenders are likely to accept your application. This will generally reduce the maximum loan available to you and will see the interest rate rise.
Lenders will tend to treat missed payments on property-backed debt, such as a mortgage or secured loan more harshly than other credit problems.
As with other types of finance, lenders will consider your credit history as a factor that either increases or decreases the likelihood of default. This will then be used to calculate your rate, with a higher risk almost always resulting in a higher interest rate.
Raising Capital Through Refinance
When looking to refinance a property that you already own, it is possible to raise additional funds. The most common reasons for doing so are:
- Investing back into the business
- Further property investment
- Refurbishing the property
- Paying an urgent bill
Commercial mortgage lenders will generally allow some element of capital raising on your application. Any additional borrowing would have to meet all the other criteria to be acceptable.
Different lenders have different approaches to capital raising, especially when it is for further property investment. Some lenders will release the capital, allowing you to find a property as you see fit, while others will want to know exactly what you’re buying.
If you’re looking to raise capital for investment into the business or property, it is important that you’re clear on whether you have definite plans in place. If the lender wants proof of exactly what you’re planning on spending the money on and you’re yet to find the property then your application will be severely delayed.
Checking on what the money is used for is known as ‘following the money’ and is a tool used as a defence against money laundering. As it is used for such an important reason, we recommend being clear on exactly what the money will be spent on before application.
There are lenders that will release the funds you need without having a definite plan in place but they reserve the right to delay the application while you find the right property.
I’ve Been Turned Down by my Bank, Will I Still be Able to Get a Commercial Mortgage?
Commercial mortgage lenders have very different requirements when assessing a loan. Even if you’ve been turned down by your own bank, there is still a good chance that we will be able to help. Your own banks products may not be the most suitable lender for you in the first place, so often it proves to be a blessing in disguise.
There are lots of specialist lenders who can be a lot more flexible than high street banks. When looking for a new lender, assessing the whole market can actually result in a much better fit for your business.
Different lenders tend to favour different sectors and different circumstances. Because of this, an application that was turned down by one lender may be seen as an ideal case by another. Our experience means that when we submit an application, we present it properly giving you the best chance of success.
When looking for a new lender after a case has been declined, the commercial mortgage rates offered won’t always increase. Perception of risk and pricing is very different at different lenders and as such you may find you’re still able to enjoy competitive rates, regardless of previous adverse credit or declined applications.
Commercial Mortgage Deposit Shortfalls
If you own other properties or have a profitable trading business there is a good chance we will be able to assist you in raising your deposit.
A consideration in this is, of course, the additional monthly payment. Consider the additional borrowing and the effect this may have on your ability the main commercial property mortgage.
Your dedicated commercial mortgage broker will be able to discuss your needs and provide figures for your additional borrowing.