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Commercial Mortgages News

Appointment of new Commercial Mortgage Specialist

The Mortgage Hut’s newly launched commercial arm, The Commercial Mortgage Hut, has bolstered its presence by appointing a nationwide commercial mortgage specialist.

What deposit will I need for a commercial mortgage?

The deposit needed for a commercial mortgage can often vary between properties and businesses.

The Mortgage Hut - Commercial Mortgage Specialists

Searching for a commercial mortgage to finance a property for your business? You may not realise that The Mortgage Hut have a strong reputation for efficiency, diligence and an honest approach when dealing with commercial mortgages.

Commercial Mortgages, Bridging & Short Term Finance

Welcome to The Commercial Mortgage Hut, one of the UK’s leaders in commercial mortgages, bridging and development finance and other unregulated finance. Throughout our website, you’ll find information on a wide variety of things to do with lending on a commercial basis.

If you’re thinking about buying an investment property in the city, getting a mortgage for a retail unit for your business to operate from or sourcing funds to build any size of new housing development, our website has all the information you need to ensure that you have all the answers. We arrange millions of pounds of funding every month and our specialist advisers will be with you on every step of the journey from start to finish.

Our team is based in Southampton and cover the entire country, working with customers face-to-face, online or over the phone in a way that suits your needs. Whatever your question is, we’re pretty sure that you’ll find everything you need on our site. We have comprehensive blogs covering all aspects of commercial funding and plenty of
pages that are packed with detail. But, if you’d like to speak to one of our specialists, our team is available seven days a week to talk you through any queries you may have
.
Contact us on 02380384442 or simply fill in our contact form and we’ll call you back!

Expanding your Business

The Mortgage Hut are also a commercial mortgage broker, with a strong reputation for our competence, efficiency, diligence and honest approach. As with our domestic mortgages we are able to manage a mortgage application from start to finish, dealing with all the paperwork and correspondence, even making sure that we deal with the mortgage lender’s commercial manager on your behalf.

For more information please contact us on 02380384442 or simply fill in our contact form and we’ll call you back!

Buy To Let Mortgages

The Mortgage Hut can help potential or existing landlords find a suitable buy-to-let mortgage. So whether you already have a large portfolio and are looking to finance more properties or are just starting out in property investment, our specialist advisers can assist with your needs.

Come and a take a look at our buy-to-let mortgages page to find out more about.

Commercial Mortgages

The possibility of taking out industrial mortgage finance can appear daunting, specifically if you currently have a mortgage on a domestic property. However, getting a mortgage for your business premises is often easier than you think when you use a skilled commercial mortgage broker.

Due to our know-how in the commercial mortgages sector, we can find the best commercial mortgages* for you by using our contacts and experience.

  • Commercial mortgages* sometimes offer either tracker or fixed-rate alternatives, meaning that you can be economically much better off whilst benefiting from the increased stability that property ownership provides.

  • Commercial mortgages* are also offered to consolidate financial obligations or remortgage existing commercial mortgages. This can be a genuine relief if, in the current economic environment, your business is experiencing a slower period of trading.

  • You can usually borrow around 70% of the property value, possibly more where the prospective rental yields are strong. Whatever you can provide as a deposit, The Mortgage Hut’s strong relationship with loan providers will ensure you the best deal possible.

Note: your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.

*The Financial Conduct Authority does not regulate some forms of Commercial Finance.

What is a Commercial Mortgage?

A commercial mortgage is a loan that’s secured on any property that is not your residence. This can range from warehouses and office space to other properties that you let out (see buy-to-let mortgage).

And, unlike other types of mortgage since almost every kind of property is different in a certain way, every loan has to be individually assessed and priced according to various factors.

When is the Right Time to want a Commercial Mortgage?

If you’re looking to raise up to £25,000 for a property, then you may be able to get a business loan and they are unsecured. However, if you need over £25,000, lenders will need more security in order to reduce the risk to themselves.

It’s also that, because of the legal and administrative costs associated with taking security on a commercial property, it’s generally considered uneconomic to borrow less than £50,000 on a commercial mortgage, with some lender even having a minimum of £75,000.

What can I Offer as Security?

Usually, it’s the property that you’re buying and it’s typically 70% of the value, asking for a cash deposit for the balance of the purchase price.

If you don’t have cash available to offer for a deposit, then you can offer additional security, which could be another property that you have a large amount of equity in, but remember that there might be a charge on these additional assets.

How Long can I get a Commercial Mortgage for?

They typically last between 3-25 years. Shorter term finance is available, though this may be in the form of a bridging or property development loan.

Most commercial mortgages are on variable rates and are quoted as a certain percentage over the base rate, in the same way a tracker residential mortgage would be, though commercial mortgages on fixed rates are available for under £500,000 where the lender will take the risk on.

How Much can I Borrow?

For an owner-occupied property, which is a property used for trading purposes, you can usually get a maximum of a 70-75% mortgage. If it’s an investment, such as a property that you’re going to let out, the amount you can borrow will be determined by the amount of rental income that you’re expected to achieve – though it won’t
exceed 65% of the purchase price.

What do I Need to do to Qualify for a Commercial Mortgage?

Commercial lenders usually prefer their borrowers to have some form of property investment experience as operating these types of properties require a higher level of understanding. Every case is different, and a lot of applications will depend on the strength of the proposal put forward to the lender.

However, there are a couple of things that you could do to put yourself in the best position. Like residential mortgages, the bigger the deposit you have, the more favourable you will be looked upon by the lender. A deposit between 20-30% will usually suffice for a commercial mortgage.

If you’re already a home-owner or have a couple of buy-to-let properties that you’ve owned for around two years, then lenders will also take that as a positive and that you have the experience of dealing with a non-residential property.

If you’re going for your first commercial investment, you will be able to access more options if you are looking to purchase a standard shop or shop with a flat above.

The more complex the commercial properties, the more your choices will be limited.

What about Fees?

Arrangement fees of around typically 1-2% of the loan amount for loans up to £1 million are usually added to the completion of the loan, though some lenders will want funds to cover the work that they do if you didn’t accept their offer.

As commercial properties are usually more valuable than residential, a valuer will have to visit the property and produce a report to give back to the lender. This isn’t the case for residential properties, which is why commercial valuations are a lot more expensive. The valuation fees are to be paid to the lender after the initial offer has
been accepted.

Many commercial mortgages also require legal representation that is separate and paid for by you. You will also have to pay for further legal fees for your own solicitor.

Considering how complex commercial mortgages can be, it’s not uncommon to pay a higher fee when comparing it to a residential mortgage.

Speak to The Mortgage Hut for Commercial Mortgage Advice

This sort of mortgage can be a complicated process and requires a wider knowledge of the mortgage market.

It’s imperative that you speak to a professional mortgage adviser that has access to a wide panel of lenders to ensure that you have the best chance of getting your mortgage approved.