Available up to 75% of the purchase price or valuation

The loan amount is based on the type, value and location of the property, together with the experience and circumstances of the borrower.

Available for purchasing new premises or refinancing existing commercial loans

Loans are available to trading companies wishing to purchase or refinance their own premises, or to commercial landlords.

Terms from 5 years up to 30 years available

Most loans have terms of between 10 and 20 years but lenders will consider shorter or longer terms based on the type of property and the borrower’s requirements.

Affordability of the loan is based on Rental Coverage or Debt Servicing calculations

Each lender has interest cover ratios or debt servicing calculations to confirm the loan will be affordable. These are usually based on the actual or anticipated rental but can also take into account the company’s profit or other assets.

Monthly or quarterly payments are required

Unlike the short term lending products such as bridging loans or development finance, monthly or quarterly payments are required on commercial mortgages.

Full or part repayment of capital is required

Very few lenders offer interest only on commercial mortgages for trading businesses. Some will consider interest only on loans to commercial landlords but often charge a higher interest rate for doing so.

Variable rates but some fixed rates available

Unlike residential mortgages, interest rates on commercial mortgages are decided by the lender based on the type of property, the loan amount and the strength of the overall application . Most lenders offer rates that are a set margin above Bank Base Rate but some lenders do offer fixed rates.

Fees generally lower than shorter term finance

Lenders usually charge arrangement fees of around 1%, and the interest rates are also lower than on bridging loans or development.