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Semi-commercial mortgage
We will get you the best semi-commercial mortgage deal from a wide range of UK lenders.
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Can I get a semi-commercial mortgage?
You can get a semi-commercial mortgage with a deposit of 25% of the property value, or more. This can come from cash savings, or you could raise it by borrowing against equity in other property you own.
Buying a semi-commercial property is a nice way to transition into investing in business properties, given lender criteria is more flexible. In fact, getting a semi-commercial mortgage is easier than securing pure-commercial finance because mixed-use properties carry less risk to the lender as rent is coming in from two different avenues.
Factors that may impact getting a semi-commercial mortgage
- Some types of poor credit
- Not having enough money for a deposit
- The value of the property being less than you expected
If you have questions, chat to our advisors on live chat, via the phone, or get a call-back we're here to help.
Today's semi-commercial mortgage rates
Semi-commercial mortgage rates tend to be lower than the pure commercial rates you will find in our commercial mortgage calculator, so speak to our advisors for details.
Eligibility
- First time buyers to experienced landlords
- You must be over 18 years old
- Minimum deposit 25% of the property value
- Upper age limits at application are flexible
- Low personal incomes are accepted
- Property, pension and employment income is OK
Ready to get started?
Your personal advisor will call. Direct lines start 01603. Get today's rates, help, or apply. Lender terms provided in as little as two hours!
What is a semi-commercial mortgage?
A semi-commercial mortgage, also called a ‘mixed-use mortgage’, is used to purchase or refinance a property that has both commercial and residential elements.
Semi-commercial mortgage interest rates are typically higher than for a residential rental property (which would require a buy to let mortgage); but lower than a building solely for business use (which would require a 'pure' commercial mortgage).
There is a wide range of lenders in the market offering this type of product and the team at Commercial Trust are experts in this field. Get in touch today to chat through your needs, or read on for more information.
Types of semi-commercial property
Semi-commercial property can include a range of property types. One of the most common is a shop with a flat above it, which are seen all over the UK.
Other semi-commercial property examples include:
- Pubs with living accommodation
- Offices with separate access to residential property
- Commercial units with a residential property
- Kennels or catteries with a house attached
- Doctors surgery or veterinary surgery with accommodation
- A café, restaurant or takeaway with flats above
Essentially, any mixed-use property on the same plot.
Who are semi-commercial mortgages for?
Semi-commercial mortgages are suitable for landlords / property investors who want to let out mixed use property to get income from rent or business owners who want a premises they can operate their business from, whilst also having residential space they can use or let out.
A landlord might invest in semi-commercial property to diversify their property portfolio, as a transitional step towards investing in pure commercial property, to benefit from typically higher yields associated with this type of premises, to benefit from the increased value of the property over time.
A business owner might invest in semi-commercial property to make sure their business premises is secure, to avoid paying rent and pay towards a mortgage and full ownership of the property, to operate their business from the property whilst also living on site, to use the residential element of the building to generate an income stream to help pay the mortgage, or to build long term capital value of their investment.
How does a semi-commercial mortgage work?
A semi-commercial mortgage works in a similar way to a residential mortgage. However, the main difference is that the lender will take into account the commercial as well as the residential element of the property when assessing the risk.
This means that the lender will consider both the rental income from the residential part of the property and the rental income from the commercial part of the property.
Lenders will typically lend up to 75% of the property's value for semi-commercial mortgages, but this can vary depending on the lender and the borrower's circumstances.
Why choose Commercial Trust?
Apply with ease by phone
It couldn't be easier to secure a semi-commercial mortgage with our expert advisors. Ask all your questions and arrange an application on the phone from your sofa.
World class customer service
We'll find you a great deal and take all the admin work off your shoulders, so you can relax while we get your mortgage completed. All the while giving you progress updates.
Specialist expertise
Our whole focus is landlord finance solutions, which means that you will get a recommendation based on detailed knowledge of the latest deals available.
We can help you with...
- Borrowing up to 75% loan to value
- No minimum income options
- Flexible maximum age requirements
- 2 and 5 year deal periods
- Owner-occupied commercial mortgage
- Investment mortgages based off rental income
- Complex cases
- Portfolio deals
- Limited companies applications
- First time landlord applications
- Capital repayment, interest-only or part and part
- Flexible purposes for capital raising
Case study: Helping a client secure a high yielding, semi-commercial property
We helped buy to let portfolio landlords, who did not have commercial experience, diversify their portfolio. Find out about some of the challenges semi-commercial borrowing can present.
Find out moreCosts involved in a semi-commercial mortgage
Lenders may charge you for the valuation conducted on your property. They often also charge a product fee, sometimes this can be added to the mortgage.
You will need a conveyancing solicitor who will charge fees. Read our guide to choosing a conveyancing solicitor.
We charge a broker fee for our work. You pay in two parts. A booking fee, once we have found you a mortgage deal, at application. The majority of our fee is paid at completion of the mortgage.
Every mortgage comes with monthly mortgage costs based on the mortgage interest rate the lender charges. These are paid on either an interest-only or capital repayment basis.
How to apply for a semi-commercial mortgage
1
Tell our advisors about the property you are investing in, your needs and circumstances. If you have credit concerns, chat to us about them, so we can put you with the right lender.
2
Your advisor will find the best possible deal from a search of thousands of products. They will get you a lender decision in principle, this requires a soft credit search (occasionally it is a hard credit search).
3
Your advisor will call to discuss the product they have found for you. You will be presented with one mortgage, that is the best match for all your needs and offers you the most cost effective option.
4
On your instruction, your advisor will submit your mortgage application. Your account manager then does all liaison and administrative work to complete the deal, whilst keeping you updated at every step.
What our clients say about us
Frequently asked questions
A semi-commercial mortgage is a loan on a property which has a business premises and a residential premises on the same plot. For example, a shop with a flat above. As the owner you could run your own business from the property, or let it out. You could live in the residential part of the property, as long as it is less than 40% of the overall plot.
The Financial Conduct Authority (FCA) do not regulate semi-commercial mortgages as they are seen as investment solutions for business purposes and therefore used by people who understand how they work.
A commercial property is only used for business activities; it could be anything from a small village shop to a huge warehouse distribution centre. A semi-commercial property, otherwise known as a mixed-use property, is used for both business and residential purposes. A typical example would be a shop with a flat above it, but can involve any property where the two functions are mixed.
Semi-commercial means part commercial, when talking about a property. The other part would be living space. A good example is a shop with a flat over it that someone lives in.
As the owner, you can live in the residential part of a property you have a semi-commercial mortgage on, as long as the area you live in is not greater than 40% of the footprint of the property. If your home exceeds this percentage of the property, you will fall outside unregulated semi-commercial mortgage criteria and will need a regulated mortgage. This is because the proportion of the property is biased towards residential use.
You will need a minimum deposit of 25% of the property value to get a semi-commercial mortgage. You can use cash savings as a deposit, or borrow against other property you own (e.g. your home, another residential rental property, another commercial property whether they are unencumbered – no mortgage – or have a mortgage but have enough equity to borrow against).
You can use the residential element of a semi-commercial property for any suitable living space, whether that is a long term let, holiday let, or if it has multiple bedrooms with shared living spaces, as an HMO (House of Multiple Occupation).
It is possible to get a semi-commercial mortgage with bad credit, depending on the type of adverse credit you have, how recently you had it and whether or not it has been repaid. The important thing is to be completely honest with your broker about the details. Adverse credit will always show up on your credit profile during the lender underwriting process. If you have not been upfront about your position, a valuation may go ahead that you may have paid for and could be redundant.