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Welcome to Advocate Finance, your trusted broker in securing semi-commercial and mixed-use property mortgages!
As established commercial finance brokers, we understand the unique needs of property investors and business owners. We are here to provide tailored financial solutions that help you achieve your goals.
Whether you are looking for a semi-commercial / mixed-use property mortgage, loan or refinance, we cover all aspects to ensure your success.
Semi-commercial mortgage rates refer to the interest charged on loans for properties that serve both residential and commercial purposes. These properties can include a shop with a flat above, mixed-use office spaces, or restaurants with living quarters. Since these properties carry a combination of residential and business risks, lenders set rates based on various factors to account for the different levels of financial exposure.
One of the key determinants of semi-commercial mortgage rates is the loan-to-value (LTV) ratio. Typically, the lower the LTV, the better the interest rate offered, as lenders view lower-risk borrowers more favourably. Borrowers with a strong credit history, stable income, and a solid business plan will often qualify for more competitive rates.
Additionally, lenders assess the percentage of residential vs. commercial use in a property. Properties that lean more towards the residential side often secure better rates, as residential financing carries less risk compared to fully commercial lending. The type of commercial activity conducted on the premises also impacts rates, higher-risk businesses like pubs or nightclubs may attract higher interest rates compared to low-risk enterprises like office spaces.
There are a number of lenders offering semi-commercial mortgages, however below is a snippet of some of the most competitive products as at August 2024
| Interest Rate | Max Loan to Value (LTV) | Residential / Commercial Split % | |
Lender 1 | 6.20% | 60% | Residential element must not exceed 80% of the total floor space |
Lender 2 | 6.60% | 70% | Residential element must be more than 50% of the capital value |
| Lender 3 | 7.24% | 75% | Residential element must be greater than 50% of the total value of the site |
*These figures were correct at the time of publication
**Subject to affordability and lender criteria
The calculation of semi-commercial mortgage rates involves a comprehensive assessment of both the property and the borrower’s financial profile. Lenders consider multiple risk factors to determine the appropriate interest rate, ensuring they balance profitability with manageable risk. Below are the primary factors that impact semi-commercial mortgage rates:
Key Factors Affecting Semi-Commercial Mortgage Rates
Loan Amount & Loan-to-Value (LTV) Ratio
Lenders assess the loan-to-value (LTV) ratio, which compares the loan amount to the total value of the property. A higher LTV (above 75%) typically results in higher interest rates due to increased lender risk. Conversely, a lower LTV (below 60%) can lead to more competitive rates. Borrowers who contribute a larger deposit or equity stake often secure better mortgage deals.
Property Type & Risk Profile
Different types of mixed-use properties carry different levels of risk. Lenders evaluate the balance between residential and commercial use when determining rates:
Borrower’s Financial Strength & Credit Profile
Lenders thoroughly analyse the borrower’s financial background, including:
Deciding between fixed and variable mortgage rates depends on your financial goals and risk tolerance:
Which One Should You Choose?
Yes, semi-commercial mortgage rates are generally higher due to the added risk of commercial tenants. However, they can still be lower than full commercial mortgage rates.
Some lenders offer high LTV semi-commercial mortgages, but expect higher interest rates and stricter lending criteria.
The timeline varies depending on the lender, but the process typically takes 4 to 8 weeks due to the complexity of property valuations, legal checks, and lender underwriting procedures.
Lenders typically require proof of income, bank statements, a property valuation, business financials (if applicable), and a detailed business plan if the property will be owner-occupied.
Yes, refinancing is possible and can be beneficial for securing better rates, adjusting loan terms, or releasing equity from your property.
Properties in high-demand areas with stable rental income tend to qualify for lower interest rates, while those in areas with economic instability or low tenant demand may attract higher rates.
Lenders assess the stability and financial health of commercial tenants. Long-term lease agreements with reputable businesses improve the likelihood of securing a competitive mortgage rate.
Loan terms vary but typically range from 5 to 25 years. The exact terms depend on factors such as the borrower’s creditworthiness, property type, and lender policies.
If you’re seeking the best semi-commercial mortgage rates, Advocate Finance can assist you in comparing lenders and finding a loan tailored to your needs.
Get in Touch – Click here to contact us or fill out our simple online form to discuss your financing options and secure the most competitive rates in the market.
Our expert team of mortgage brokers are here to guide you through every stage of the process.
Important Information
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
We are a credit broker not a lender.
Advocate Finance Ltd, registered at 55 Crown Street Brentwood, Essex CM14 4BD. Company Register number is 05579380. Authorised and Regulated by the Financial Conduct Authority. Our FCA registration number is 592830.
You can check via www.fca.org
We are registered with the ICO, Z1654205 and you can check via www.ico.org.uk.
We conduct both regulated and unregulated business and therefore not all products provided through us are regulated by the Financial Conduct Authority. We source mortgages and loans from a panel of lenders.
We may receive a commission that will vary depending on the lender, product, the amount borrowed or other permissible factors.
Advocate Finance is a mortgage and finance brokerage firm that specializes in securing loans and mortgages for various types of properties, including single properties, large portfolios, commercial sites, and development projects. They assist clients regardless of credit history, circumstances, or legal ownership, aiming to provide tailored financing solutions