Remortgages and Refinancing for Your Commercial Property

UK Commercial remortgages

For those individuals looking for a business mortgage to purchase a commercial property or looking to finance a purchase or remortgage, a commercial remortgage or refinance package may be the perfect solution.   With the values of commercial property strong, many business owners are looking for commercial remortgages.

There are a number of lenders out there who are willing to work with these types of borrowers but it is important to know that rates for this type of financing can vary widely from one lender to the next.

Here we will explore the information you need to know about commercial remortgage/refinance…

Information on Commercial Refinance

Lenders offering commercial refinance have become much stricter with their criteria than borrowers must meet in order to secure the loan. Although this is the case, commercial mortgages still provide an excellent option for individuals looking to purchase land, property or purchase other existing businesses.

It is important to note, however, that these lenders will generally only work with brick and mortar and not goodwill and that commercial remortgage and refinance is much more complicated than residential.

While the residential refinance market is pretty cut and dry with what is and is not accepted, the commercial market offers borrowers more of an opportunity to negotiate. The interest rate associated with commercial remortgages is based on a number of different factors, including the current running mortgage rates, the track record, and credit history of the borrower, the past and projected performance of the business as well as if special financing, such as self-cert or non-status mortgages, are needed.

When it comes to negotiating the best possible remortgage or refinance deal, there are some factors a borrower can bring to the table to use as leverage in the transaction. First, it is important for the borrower to have a proven track record of success – the less risk the lenders see in the proposal, the more likely they are to approve it with favourable terms and interest rates.

Additionally, if a borrower can bring a personal guarantee to the table, it can help the negotiation process.

Types of Properties that Qualify for Commercial Remortgage or Refinance

Commercial remortgages and refinance will only cover property or land that is being used for a business purpose.

Some of the property types that will qualify for this type of financing include:

Office areas for professional practices such as:

  1. architects
  2. dentists
  3. physicians

And others among many other types of businesses.

Compare Different Lenders and Remortgage Options

When it comes to securing a commercial remortgage or refinance, working with knowledgeable mortgage experts such as Jubilee or lending broker may be a great choice. These brokers have extensive information and experience in the industry and can help borrowers to compare options and find a deal that is perfect for their unique situation.

Brokers often have positive relationships with lending institutions, which can be important for arranging a remortgage or refinance package that meets the borrower’s needs.

Commercial mortgages can be cheaper yes, but they are generally written for a much longer term.

You will need at least a 20% deposit to buy a commercial property with a commercial mortgage.

They are very similar in many ways to residential properties but there are more fees and they generally have a longer-term.

The most common commercial mortgage is the principal and interest commercial mortgage.

You can go to your own bank or speak to a broker that will have access to many lenders, often with better terms and rates than your high street bank.  A good broker will use a commercial mortgages calculator and give you a comprehensive commercial mortgage comparison illustration.

Yes, you can get interest only commercial remortgages.  You can also get a buy to let commercial mortgage.

Yes, you can borrow 100% of the purchase price of a commercial property.  Or indeed you can borrow 100% of the commercial properties valuation.

You must have a company with a substantial balance sheet and you may need to pledge other commercial property with little or no mortgage as collateral.

It’s funding to buy a commercial property.  Commercial mortgages rates are generally slightly higher than residential mortgage rates.

You could borrow money just based on your own company or company earnings depending on what assets it has.  A commercial investment mortgage is very popular in 2024.