Semi-Commercial Mortgages
What is a Semi-Commercial Mortgage?
A semi-commercial mortgage is designed for properties that have both residential and commercial elements. These loans are ideal for business owners who want to purchase or refinance a property they trade from while benefiting from residential rental income. They are also suitable for investors looking to expand their portfolios with mixed-use properties.
Examples of semi-commercial properties include:
- Shops with flats above
- Offices with residential units
- Guest houses or B&Bs with owner accommodation
- Pubs, restaurants, or cafés with living space
Key Benefits of a Semi-Commercial Mortgage
- Higher Rental Yield Potential – Mixed-use properties can generate strong rental returns from both commercial and residential tenants.
- Offset Mortgage Costs with Rental Income – Residential rental income helps cover mortgage payments for business owners, reducing business expenses and making ownership more cost-effective than renting.
- Diversified Income Streams – Reduce risk by earning income from different property types.
- Long-Term Stability – Secure ownership of a property for business use while benefiting from capital appreciation.
Who is Eligible?
Semi-commercial mortgages are available to:
- Business owners looking to buy or refinance their trading premises
- Property investors purchasing mixed-use buildings
- Landlords converting commercial property into mixed-use
- Limited companies, sole traders, partnerships, LLP, pensions (SIPP or SSAS), charities
How much can you Borrow?
- Loan-to-Value (LTV): Up to 80% (higher with additional security).
- Loan Amounts: Typically start from £100,000 with no upper limit.
- Affordability: Is determined by the profitability of a business if owner-occupied, and the rental income versus mortgage repayment if purchased as an investment.
Interest Rates & Terms
- We secure the best rates from the market, ensuring you get the most competitive and suitable deal possible.
- Rates depend on risk profile, deposit, and lender criteria. Interest rates typically start from 1.5%-5% above Bank of England base rate, but fixed rate options can often be more competitive.
- Repayment terms typically 5 to 30 years.
- Fixed and variable rate options available.
- Capital and interest, and interest only options available.
