Do I Need a Commercial Mortgage?

In the market to invest in property to make money? Or, perhaps you’re looking to buy property as a base for your business. If that’s the case, then you will need a commercial mortgage. If your business loan has come to an end and you still need to borrow to afford property or land, that’s another instance where a commercial mortgage becomes necessary.

Do I need a commercial or residential mortgage?

Industrial, retail and commercial offices all need a commercial mortgage*. If you’re purchasing residential accommodation with a view to investing, then a business mortgage also applies.

You also have the option to secure a semi-commercial mortgage. This is applicable to properties that are both a place of residence and business – a flat above a shop for instance.

Most businesses can apply for a mortgage. You may be turned down by a lender if they feel it’s a poor investment, but other than that, you should have no trouble applying. In other words, there aren’t usually restrictions on what type of business can secure this type of loan.

If you’re thinking about buying a property for a main residence now, but with a view to potentially turning it into an investment further down the road, you should opt for a residential mortgage with flexible terms. Make sure you have the option to switch to a commercial mortgage without a huge penalty fee attached but also be mindful that you may need to apply for a change of use for the property which is a legal process via a solicitor.

What about second homes?

Second homes that are not being let out or used for business purposes should be purchased with a residential mortgage.

What about leasehold properties?

You can get a commercial mortgage for a leasehold property, but you will need at least 70 years left on the lease.

Speak to Agentis

If you’re looking to buy rather than rent, Agentis can help. We’re specialist mortgage brokers with over 80 years’ combined industry experience. Contact us today to book your free initial consultation.

*Commercial Mortgages are arranged by Introduction Only. Commercial Mortgages are not usually regulated by the Financial Conduct Authority.