We know that comparing commercial mortgage lenders isn’t how you would ideally like to spend your time. Whether you’re looking to save money on your existing mortgage, buy a new business property or raise additional funds, we’ve got you covered.
That’s why we’ve built our quick and easy comparison tool to allow you to compare lenders from across the market. Take a look at the latest products, find the ideal fit for you and apply online instantly.
Once your application is cross checked, we will begin the process for you straight away.
Read on below to find out more or fill in the form to talk to an expert.
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Types of Commercial Mortgage
If you’re looking to buy a business property, chances are you’re going to need a commercial mortgage to complete the purchase.
This type of borrowing can also be used to raise money against a property that is already owned, to purchase an unusual property, or to convert an existing property into a commercial unit. Not all lenders operate in the same way and costs can vary a great deal between one lender and another.
Owner-Occupied Business Mortgages or Commercial Investment
Commercial mortgages are used to purchase or refinance commercial and mixed-use properties. Owner-occupied commercial mortgages are designed to fund a property which is to be used for your own business purposes.
Commercial investment properties share a number of similarities with a standard residential buy to let. When a commercial property is purchased and leased to another person, or business, it is classed as a commercial investment property.
Unlike a residential property, buy to let mortgages aren’t suitable for raising money, which is where a commercial investment mortgage comes in.
Commercial investment mortgages are usually entirely different products than the ones designed for owner-occupiers. As such, it’s important that you make sure you choose a suitable product in this area, or your application may be doomed to failure.
Fixed Rate or Variable
Much like residential mortgages, many lenders will allow you to fix your interest rate for a period of time. This means that the rate, and subsequently your monthly payments will remain the same during the fixed rate period.
Unlike fixed rates, variable rates – as their name implies – can go up or down depending on market conditions.
Interest Only or Capital Repayment
Capital repayment monthly payments are made up of both the interest charged and repayment of a portion of the capital itself. By making all repayments in full and on time, capital repayment loans are fully repaid at the end of the term as long as all repayments are made.
Interest only loans, on the other hand, involve payment of only the interest each month. This means that the capital remains outstanding at the end of the term.
Which Commercial Mortgage is the Best?
The best lender and product will depend on your own individual circumstances. Not all lenders will offer each product, so it’s important to compare the entire market when searching for the best deal.
If you’re unsure which product is the most suitable for you, contact [Link to Contact page] one of our experienced experts, who will be happy to talk through your options.
Comparing Commercial Mortgage Products
When comparing products, it’s important that you take all fees and charges into account. Choosing a product based on the interest rate alone will often result in you not selecting the cheapest option.
By considering all of the above, you can get an understanding of the total cost of the loan, allowing you to make a smarter choice
What Happens Once I Apply?
We like to keep things simple, so we’ve refined the process.
We review the product selected against your circumstances and will call you to ensure that you’ve chosen the best product for your circumstances.
If this is all in order, then we will let you know what documents the lender will need to take your application forward and request them from you by email.
If there is an opportunity to save you even more money, we will offer you an alternative product.
Comparing Different Types of Commercial Mortgage Lender
Lenders come in different varieties and each have their own benefits and drawbacks.
The most well-known tend to be high-street banks, which often offer very low interest rates compared to other lenders. Although these rates are very attractive, they do also tend to come with the most stringent criteria and as such, not everyone will be eligible.
These mortgages from high-street banks are typically reserved for the best quality applications, which means strong credit history and affordability. Commercial investment mortgages will be expected to have long leases in place with high quality tenants.
Challenger banks are growing in popularity and are a strong alternative to high-street banks. They do often charge slightly higher rates than the high street, but do benefit from certain perks, such as higher loan to values and the ability to pay interest only.
Challenger banks may be willing to accept shorter leases, take a more relaxed view to affordability and may accept historic credit problems.
Finally, specialist commercial mortgage lenders tend to take a very relaxed view to lending in comparison to the other two. The price you pay for this is a higher interest rate and lower loan to values. These lenders will rarely be the first choice but can be a valuable source of funds when needed.
Comparing Commercial Mortgages to Residential Mortgages
Commercial mortgage rates are generally higher than residential and the maximum loan to value lower. We regularly discuss this with borrowers who are unfamiliar with commercial borrowing who feel that the rates charged are too high.
The reason for the difference in rate is due to the higher risk associated with borrowing. This comes down to the increased risk of missed payments and arrears and the fact that commercial property is less liquid than residential.
Another key difference between the two is the fact that commercial lending tends to be handled manually, rather than by a computer. This can lead to more back and forth between yourself and the lender. However, it does allow you to explain yourself and for common-sense lending to take place.
Compare products above and apply online for your preferred option.
We manage your application through to completion for you, helping you every step of the way.
We’re not just interested in introducing you to a lender. We want to work with you throughout the whole process to ensure the application is complete quickly and easily.
Why Compare Commercial Mortgages with ABC Finance Ltd?
Costs can vary significantly between different lenders. With a number of rates and fee options and repayment methods, there are big savings to be made.
Whether you want to check you’re on the best deal or purchase a new commercial property, we can save you money and take all the hassle out of the process.
Securing Your New Commercial Mortgage
To secure your new business mortgage, compare the products above and apply online instantly.
Alternatively, to discuss your requirements with an expert, enquire now for a call back, or get in touch now on 01922 620008.
About The Author
This content was produced by our Commercial Lending Director, Gary Hemming. Gary has over 15 years’ experience in financial services and specialises in bridging loans, commercial mortgages, development finance and business loans. He is widely respected in his field and regularly provides expert commentary for specialist trade publications, specialist business press as well as local and national press.
Gary Hemming CeMAP CeFA CeRGI CSP -
Commercial Lending Director
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