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Finding the best semi-commercial mortgage rates is about more than just approaching your local bank. Whether you’re purchasing a property that blends commercial and residential use, or refinancing an existing loan, knowing what lenders look for and how to present your application can make a significant difference in the deal you secure.
In this guide, we’ll explore the key steps to getting the best rates, common pitfalls to avoid, and how Advocate Finance can help you navigate the process.
Understand What Affects Semi-Commercial Mortgage Rates
Semi-commercial mortgage rates are influenced by a variety of factors. These include the loan-to-value (LTV) ratio, property type and usage, the strength of your personal and business finances, and the lender’s assessment of risk.
1. Loan-to-Value (LTV) Ratio
The LTV ratio plays a significant role in determining your rate. A lower LTV (i.e., a higher deposit or more equity) typically results in a lower rate, as it reduces the lender’s risk. Most lenders cap semi-commercial LTVs at around 70%, though some may offer more flexible terms for stronger applicants.
2. Property Type and Tenant Mix
Lenders will assess the makeup of the property, what percentage is residential and what is commercial, and the nature of the commercial tenant. A flat above a retail shop with a stable tenant like a pharmacy or office carries less risk than a restaurant, pub, or nightclub. The more stable and low-risk the commercial tenant, the more favourable your rate is likely to be.
3. Borrower Profile
Your credit history, income (personal and rental), net worth, and experience in property investment or business are key factors. Lenders will want to see strong evidence of your ability to repay the mortgage, this might include recent accounts, tax returns, SA302s, and bank statements.
4. Purpose of the Loan
Rates can also vary depending on whether you’re purchasing, refinancing, or capital raising. For example, a straight purchase with a lower LTV may attract a better rate than a refinance with capital raising, which could be viewed as higher risk.
Improve Your Eligibility
If you’re aiming for the best rates, here’s how to present yourself in the strongest possible light:
- Increase your deposit: A lower LTV significantly improves your appeal.
- Clean up your credit: Address any adverse credit issues before applying.
- Prepare financials: Have your accounts, tax returns, and rental income figures up to date and ready.
- Secure long-term tenants: A commercial lease with 5+ years remaining will look far more favourable to lenders.
- Avoid high-risk tenants: Opt for businesses that are stable and less affected by economic swings.
Work with a Specialist Broker
High-street lenders often have rigid criteria and may not offer the most competitive deals for semi-commercial properties. This is where a specialist broker like Advocate Finance can add real value.
Advocate Finance has access to a wide panel of lenders, including those who specialise in semi-commercial and mixed-use properties. We understand how to present your case, match you with the right lender, and negotiate the best possible rate.
Learn more about current rates and how they’re structured on our Semi-Commercial Mortgage Rates page.
Contact Advocate Finance
Securing the best semi-commercial mortgage rate isn’t just about ticking boxes—it’s about understanding what lenders want and making sure your application aligns with those expectations. From managing your LTV to choosing the right tenants and using the right broker, each decision plays a part.
If you’re ready to explore your options and want expert support, Advocate Finance is here to help.
Get in Touch with Advocate Finance to find the best rate for your property today.
