Semi-Commercial Mortgages

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What are Semi-Commercial Mortgages?

Semi-commercial mortgages are a property backed loan designed for property which is comprised of both residential and commercial elements.

They are available for a diverse array of properties and can be used to purchase or remortgage a property.

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

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Latest Semi-Commercial Mortgage Rates

We offer semi-commercial mortgages from lenders across the whole market. Compare the latest leading rates and apply online instantly.

Product CM0001 - Apply Now
Interest Rate
2.75%
Rate Type
Variable
Lender Fee
1.50%
Max LTV
80%
Min-Max Loan
£2,000,000 - £80,000,000
Property Type
Mixed Use Or Commercial
Own Occ/Investment
Owner Occupied
Max Term (Years)
20
Repayment Or Int Only
Repayment
Product CM0002 - Apply Now
Interest Rate
2.85%
Rate Type
Variable
Lender Fee
1.50%
Max LTV
65%
Min-Max Loan
£1,000,000 - £80,000,000
Property Type
Mixed Use Or Commercial
Own Occ/Investment
Investment
Max Term (Years)
15
Repayment Or Int Only
Repayment
Product CM0003 - Apply Now
Interest Rate
3.00%
Rate Type
Variable
Lender Fee
1.50%
Max LTV
80%
Min-Max Loan
£500,000 - £2,000,000
Property Type
Mixed Use Or Commercial
Own Occ/Investment
Owner Occupied
Max Term (Years)
20
Repayment Or Int Only
Repayment
CLICK HERE TO COMPARE MORE MARKET LEADING PRODUCTS

Criteria

Every semi-commercial, or mixed-use property is different and as such, each application will be judged on its own merits. As a guide, we can usually offer the following:

1Up to 80% Loan to Value (LTV).
2Repayment or interest only.
3Market leading rates from 2.75%.
4Borrow from £25,000 – no maximum loan.
5Terms from 5 years to 25 years.
6All property types considered on their merits.
7Semi-commercial investment or owner-occupied loans.
8Adverse credit considered.

What Properties Are Classed as Semi-Commercial?

The banner of ‘semi-commercial’ covers a wide range of properties. Any property that comprises of both a commercial element and living accommodation will be classed as semi-commercial.

Some lenders charge lower rates for semi-commercial properties than are charged for fully commercial buildings. Where this is the case, there are sometimes splits in the ratio of residential to commercial space needed to secure the lower rate.

Another point that could exclude your property from being eligible, is where there is a single access to the property, meaning it could only be occupied by a single tenant or business owner.

Living in the Residential Portion of the Property

If you’re planning on living in a portion of a semi-commercial property and either working from, or letting the commercial element, most lenders will treat your application as FCA regulated. Although this will reduce the number of lenders who would be willing to accept the application. However it is still acceptable to some.

Specialist advice is crucial, and we are highly experienced in this situation.

How Much Can I Borrow?

We offer semi-commercial mortgages from £25,000 with no maximum loan amount. Regardless of the size of your application, we can usually help.

Lenders will usually allow you to borrow up to 75% LTV when buying or remortgaging a mixed-use property. Of course, as with other types of mortgage, the maximum loan may also be restricted by the lender’s affordability calculations.

Semi-Commercial Mortgage Costs

Semi-commercial mortgage rates start from as low as 2.75% per annum. The interest rate charged will vary depending on the quality of the application, the size of the loan and the LTV. Larger loans will usually receive lower rates than smaller ones, for similar quality applications.

In addition to the interest, lenders will charge an arrangement fee, which is usually between 0.75 – 2% of the loan amount.

Completion Timescales

Semi-commercial mortgages can usually be completed in around 6 – 12 weeks from the initial application. Of course, the timescales for each application can vary.

By ensuring you provide all the required information upfront, and any additional information as it is requested, you can cut down your application to the lower end of this scale.

What Information Will I Have to Provide?

When applying for a commercial mortgage, you will need to provide the following information:

  • A fully completed application form
  • 3-6 months personal bank statements
  • 3-6 months business bank statements (for owner-occupied applications)
  • 2 years accounts (for owner-occupied applications)
  • A copy of any leases or ASTs (for commercial investment applications)
  • Assets, liabilities, income & expenditure information
  • Who Lends on Semi-Commercial Property?

    There are a lot of lenders out there, and they can largely be broken down into smaller groups:

  • High Street Banks – High street banks are still very active in the market and tend to offer the lowest rates to borrowers. The flipside to this is that criteria is tight, as are affordability rules. High street banks will usually want to see strong financial performance when lending to a business, long leases to strong tenants for commercial investments and clean credit history from applicants.
  • Challenger Banks – The rise of the challenger bank has been a major positive since the credit crunch. These lenders tend to have more flexible criteria than high street banks and may overlook minor adverse credit. In addition, affordability rules may be more lenient and shorter leases acceptable for investment applications. Over recent years, the rates of challenger banks have reduced significantly, bringing them much closer to those of high street banks.
  • Specialist Independent Lenders – There are other specialist lenders in the market who will lend against semi-commercial property. These lenders tend to be the most flexible and as such charge the highest rates. They will accept heavier adverse credit, very short-leases or poor-quality tenants and very relaxed affordability rules for business owners. When borrowing from these lenders, the maximum loan to value will usually be lower, around 65-70% of the property value.
  • I’ve Never Owned Commercial Property Before, Will I Be Eligible?

    We can fund first time commercial property owners, whether you’re looking to purchase for your business or as an investment.

    We’re starting to see an uplift in first-time buyers who are looking to invest in semi-commercial property, which is something we can help with.

    Get Started Today

    We offer you two ways to get started with your application right now.

    • Compare semi-commercial mortgage rates online and apply online instantly. We will run through your application to ensure it will meet the lender’s criteria and has the best chance of success and then submit the application for you.
    • Contact us to talk to an adviser and they will be able to run through your application in detail, and offer you written terms in under two hours. From there, they will work with you until you’re 100% satisfied with the terms offered.
    about-the-author-gary-hemming

    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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