When businesses or investors are considering purchasing a high-value property, the competitiveness of their mortgage rates is a crucial consideration in ensuring viability and profitability.
The Revolution Brokers team often deals with enquiries from clients interested in finding out whether they will be able to secure the value of financing they require or needing to know where the best rates are available.
For further help with large commercial mortgages, or any advice outside of the scope of this article, give us a call on 0330 304 3040 or email at email@example.com.
What Value Constitutes a Large Commercial Mortgage?
Each business is different and might have a different perception of a large value of borrowing. Generally, commercial mortgages don't have a maximum cap, since this all depends on the circumstances and applicant.
However, the typical commercial mortgage falls at around £400,000, and most lenders consider a mortgage above £1 million to be large.
Are There Different Affordability Criteria Depending on the Size of Commercial Mortgage?
In essence, no, the affordability criteria remain the same whatever the size of the loan you apply for. That said, if the value is high, a lender might be stricter as they need to ensure you can keep up with the repayments.
Lenders will assess your operating profits and trading history to arrive at an offer figure.
Can I Use a Commercial Mortgage Calculator for a Large Loan?
Online calculators are useful, but a calculator won't give any indication as to their eligibility criteria or lending policies.
In some cases, negotiations and context are required before a lender can approve a mortgage application since this is decided on a case-by-case basis.
How Much Deposit Do I Need for a Large Business Mortgage?
Typically, a lender will need a deposit from 20% and up to 40%, all depending on the risk profile and type of mortgage you need.
For owner-occupier mortgages, where you will be trading from the property, you'll need a deposit at the lower end of the spectrum. For commercial investment mortgages where the property will be let to business tenants, you will need a higher deposit, as mortgages are often capped at around 75% Loan to Value, compared to 80% for owner-occupier loans.
As an example, if you are buying a property for £1 million, you will need a deposit of £200,000-£400,000.
Are There Large Business Mortgages Available Without a Deposit?
If you are looking for a large commercial loan and don't have a deposit available, you will be seeking a 100% LTV mortgage. This is an unusual product but can be negotiated if you have other security to offer instead of a deposit.
Where Can I Find the Cheapest Rates on Large Commercial Mortgages?
You might find it very difficult to compare lenders since commercial lending rates are rarely published or made available without an application having been made.
This is because lenders do not rely on standard rates, but rather assess each application on its own merit.
Does a Business Mortgage Get More Expensive the Larger the Value?
Not really - it is more likely to be the Loan to Value ratio, than the monetary value of the mortgage, which impacts the interest charged.
The best way to secure the more attractive rates is to work with a whole-of-market broker who can recommend the most competitive deals, and the ideal lenders to apply to, where they know your application will conform with eligibility criteria.
What are the Eligibility Criteria for Large Commercial Mortgages?
The criteria don't differ much from any other business mortgage - but since commercial loans are often unregulated, these are bespoke to your company, and the decision will depend on your circumstances.
Lenders will consider:
- Your credit rating and credit score - with specialist bad credit lenders available where mainstream lenders consider your credit history a negative.
- Trading history, and how much stability your business has in your given sector. New start-ups are best advised to work with an independent broker who works with niche mortgage providers for new companies.
- The deposit - the higher the value of the deposit or security on offer, the lower the risk and the more favourable the interest rates.
- Business plans. Your lender will want to see what your future projections are and whether the growth trajectory of the business is on an upward trend.
How Can a Commercial Broker help me find a Large Business Mortgage?
An independent broker is invaluable in finding the right lender for a business mortgage of £1 million and above. As a whole-of-market provider, the Revolution team has the flexibility to recommend products from any lender and according to any range of unique circumstances.
Give the team a call on 0330 304 3040, and we will get your application fast-tracked to achieve the more favourable deals on the market.
Is it Easier to Apply for a Smaller Commercial Loan?
Once you have decided how much you need to borrow, our team can recommend the right lending option for you.
In some cases, you might need £25,000 or less, in which case a business loan might be more cost-effective than a mortgage.
Independent UK Experts in Large Commercial Mortgages
Before proceeding with any large business mortgage application, it is strongly advisable to consult an independent broker. We can advise whether the rates and terms on offer are competitive, or whether better deals are available through specialist lenders, many of whom do not publicise their rates on the open market.
Contact Revolution Brokers on 0330 304 3040 or via email at firstname.lastname@example.org.