What is a commercial mortgage?
A commercial mortgage is a secured loan used to purchase, refinance or raise capital against commercial property. Unlike residential mortgages, commercial mortgages are assessed on the strength of the business or investment case rather than personal income alone.
Types of commercial mortgage
Commercial mortgages generally fall into two categories:
- Owner-occupied — for businesses purchasing their own trading premises.
- Commercial investment — for investors acquiring property to let to commercial tenants.
How much can I borrow?
Lenders typically assess loan-to-value (LTV), rental coverage ratios (for investment), business affordability, and the strength of the applicant's track record. LTVs of up to 70-75% are common, though this varies by lender and property type.
What do lenders look for?
- Business trading history and financial performance
- Property valuation and survey
- Rental income (for investment properties)
- Applicant experience and track record
- Exit strategy and repayment plan
How long does the process take?
Commercial mortgage applications typically take 4-8 weeks from initial enquiry to completion, depending on the complexity of the case, the lender's underwriting process and the speed of valuations and legal work.
To explore your commercial mortgage options, speak to one of our specialists.