Commercial Mortgages for Investment Property and Self Owner Occupation

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Landlords who want to acquire Commercial Property for investment purposes maybe interested in our low rate offering. Also Self Owner Occupation can be provided for the Business with sufficient net profit to support the Commercial Mortgage.

Low Rate Offering

Landlord Mortgages can arrange Commercial Mortgages on the following Commercial Property:-

Retail with Residential: such as a shop or shops with a flat or flats above
Offices
Retails Shops or Post Offices
Industrial Units: Modern with a ‘light’ use

For Self Owner Occupation the Commercial Mortgage lender will also lend on Doctors Surgeries, Guest Houses, Professional Practices, Nursing Homes, Care Homes and Public Houses.

If the Covenant is a good Covenant, such as Barclays Bank for a period of 10 or more years, then we are likely to secure rates as low as 1% over Bank of England Base Rate. The Loan To Value can be as high as 80% of the purchase price/open market value and the lender arrangement fee can be 1.5% of the mortgage amount. The maximum loan to value on Public Houses, Care Homes and Nursing Homes is 75%.

The Commercial Mortgage Lender will provide both Remortgage and Purchase.

The Landlord must have a clean credit history and sufficient rental coverage. The calculation for the minimum monthly rental coverage is the monthly mortgage interest times 1.2 i.e. the expected gross monthly rental income must exceed 20% of the monthly mortgage interest.

Important:-

The rental coverage requirement can increase if the Commercial Mortgage lender is of the opinion that the Covenant is weak. If the Commercial Mortgage lender is of the opinion that the Covenant is acceptable but weak then the calculation for the minimum rental coverage can increase to: mortgage interest times 1.4 i.e. the expected gross monthly rental income must exceed 40% of the monthly mortgage interest.

Self Owner Occupiers will need to show that net profit will cover 150% of the proposed mortgage payment. For example, if the mortgage payments were £50,000 per a year then the Net Profit must exceed £75,000.

It is unlikely that the Commercial Mortgage Lender will lend at Bank of England Base Rate plus a margin of 1% if the covenant is weak. The interest rate charged can increase to a maximum of 2.49% above the Bank of England base rate.

The minimum loan on this particular type of Commercial Mortgage is £150,000 and the maximum loan (by referral) is in excess of £1 million.

Both ‘Capital and Interest’ and ‘Interest Only’ options exist and either can be combined with a flexible overpayment facility. The overpayment facility allows you to overpay up to 20% per a year.

If the property is leasehold then you must ensure that the lease exceeds 60 years at the point the mortgage is drawn and 35 years at the end of the mortgage term.

Only property in England and Wales are acceptable on this particular Commercial Mortgage Scheme. Other Commercial Mortgages are available for properties located in Scotland and Northern Ireland.

If you redeem the Commercial Mortgage in the first three years then the Commercial Mortgage Company will charge you a redemption penalty equal to 3% of the amount redeemed (if part repayment then the first 20% will be deemed a overpayment as detailed above).

On this particular Commercial Loan Petrol Stations, Golf Clubs, Nightclubs, Churches, Development finance proposals, Heavy Industrial, Farms, Hotels and Schools are excluded.