Business owners wishing to purchase real estate or land for their use as a place of business are the primary target audience for commercial mortgages, also known as business mortgages.

For many firms that have grown effectively and are wanting to expand beyond their current business property or set up a new work space, it's a familiar procedure. For business owners hoping to avoid rising rent or maintenance and administration costs, it is frequently the best course of action.

A commercial mortgage differs primarily from a residential mortgage in that the value of the land or property is typically substantially higher. Commercial mortgages also follow the pan-European Mortgage Credit Directive, which covers both residential and commercial mortgages, but they are typically not pre-set products like residential mortgages because to the extreme diversity of land and buildings.

Buy-to-let mortgages are a particular kind of business mortgage, just as any loan secured by real estate other than your home is a commercial mortgage. A commercial mortgage is required if you intend to purchase a property to rent out for additional income.

How can I get a commercial mortgage?

Depending on your lender, you have a wide range of possibilities. It may require some time and thorough investigation to locate a commercial mortgage, but you should locate a lender who can accommodate your specific requirements. At this point, a mortgage broker can be useful.

Keep in mind that you'll need specific documents in order to apply successfully before you begin your search. Verify that you possess:

Current records of asset, liability, and bank statements Performance metrics (both anticipated and actual) The information about your directors and partners tax returns (for a minimum of three years)

What are commercial mortgage terms?

Terms can vary. Some repayment plans have three-year terms, while others may offer a term of 25 years; the average is around 15 years.

Terms are often dictated by the size of and value of the property, or the available deposit you have, with many lenders offering commercial mortgages at a variable rate.

Youll need to watch out for complex clauses or directives where there are greater risks to the borrower if you have any doubts or youre unsure of the contract wording, your mortgage broker will be able to help.

If you are looking for a bestcommercial mortgage rates, you will find that we offer several options that will suit your needs.

How much is a deposit for a commercial mortgage?

Although they can differ, commercial mortgage deposits typically represent 30% of the property's total value.

Your deposit may vary based on the kind of business you operate. If a lender believes that your business is more "high risk," such as if it's a restaurant or bar, they might need more money.