Agricultural Commercial Mortgages

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What Are Agricultural Commercial Mortgages?

Agricultural mortgages are a type of commercial mortgage that is specifically resigned for agricultural, rural or equestrian properties.

They are most commonly used for the purchase or refinance or farms, farmland and the associated buildings.

Read on below to find out more or fill in the form to talk to an expert.

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We can offer mortgages for farms and other agricultural properties on the following basis:

1 Borrow up to 80% of the property value.
2 Monthly, quarterly, bi-annual or annual repayments available – to suit your cash flow.
3 Lending available from £25,000 with no maximum loan size.
4 Borrow for up to 30 years.
5 Fixed and variable rates available.
6 Capital repayment with 12 month interest only period available.
7 Each agricultural mortgage will be manually underwritten based on your own individual circumstances, with a tailored solution designed specifically for you..

Types Of Agricultural Property

Agricultural mortgages can be secured against the following property types:

  • Working farms
  • Rural businesses
  • Farms ran as a lifestyle business alongside other income
  • Equestrian
  • Country estates
  • Renewable energy sites
  • Equestrian businesses

Uses For Agricultural Funding

Agricultural mortgages can be used to fund the purchase or refinance the above properties. Conversions to properties and expansions may also be acceptable.

Agricultural mortgages can also be used to raise finance for debt consolidation or to purchase new equipment to drive your business forward.

Each business is unique and whatever your borrowing requirements, there is usually a lender who is happy to help.

Affordability & Your Accounts

The lender will assess affordability using your accounts, however they will work from the EBITDA (earnings before interest, tax, depreciation and amortisation), rather than the net profit. EBITDA removes certain costs from the accounts to give a truer picture of profitability for lending purposes.

The latest two years accounts are usually assessed for agricultural mortgages.

How Much Can I Borrow?

We offer agricultural mortgages from £25,000, with no defined maximum loan size, often lending millions of pounds in a single transaction. We can offer up to 80% of the value of the property, land and any other buildings.

The amount borrowed will be subject to normal underwriting checks and must be affordable and the repayments sustainable.

Finance Terms

Each business is unique and the finance terms offered will usually be tailored to your individual circumstances. Lenders will often offer both fixed and variable rates, with fixed rates being available for up to 10 years.

Some lenders will allow you to take out your agricultural mortgage on a capital repayment basis, with interest only periods available for up to 12 months. Interest rates usually start from 2.25% per annum, with most applications being approved at between 2.75 – 4% per annum. Each lender will charge a lender arrangement fee of between 1.5 – 2% of the loan.

Loan terms are usually available from 5 – 30 years.

Timescales & Application Details

Agricultural mortgages usually take around 6 – 8 weeks to complete. The time taken for your application to complete will depend on the complexity and nature of the transaction.

Applying For An Agricultural Mortgage

When applying for agricultural mortgages, the lender will usually require the following information:

  • 6 months business & personal bank statements
  • Details of the planned use of any excess funds and the likely effect on the business (for capital raising remortgages)
  • 2 years’ accounts

Working With ABC Finance Ltd

We work with lenders across the whole agricultural finance market to secure you the best possible deal on your mortgage. Our advisers are experts in their field and give you honest unbiased advice to save you money. We are committed to saving you money, so we don’t charge a broker fee for commercial mortgages over £100,000.

Once we’ve helped you to select the best possible product, we will submit the application on your behalf and work with the lender. Our goal is to ensure your application has the best possible chance of success and is completed in the quickest possible time.

Enquire online or call us on 01922 620008 to get started with your agricultural mortgage.


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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