revolution-broker-logo_3658.png
Call Us
0330 304 3040
General Enquiries
info@revolutionbrokers.co.uk

Thinking of Buying a Home?

We specialise in all aspects of Residential & Commercial Lending; we are your guiding partner throughout the borrowing process.

Get Started

Mortgage Terms on Commercial Lending

Mortgage Terms on Commercial Lending

Get Started

Whole of market brokers

    With 1000+ exclusive mortgage products, you can be sure that we will find the perfect deal for you.

Mortgage that suits you

    No matter your circumstances, we are here to get the right mortgage for you.

On time customer support

Our customers are our priority
and they get quick responses.

The Revolution team often deals with clients seeking a commercial mortgage, and wanting to know where and how to get the lowest mortgage rates!

This includes considering the length of the mortgage term and balancing out the cost of your borrowing repayments against commercial mortgage rates, and the impact on your cash flow balances.

Here we have summarised the most important criteria for achieving competitive commercial lending, but if you need further information or would like to enquire, please give the team a call on 0330 304 3040 or drop us a message to info@revolutionbrokers.co.uk.

How Long do Typical Commercial Mortgages Run For?

Average terms vary and can last up to 25 years in line with typical residential mortgages, although maybe as little as three years or as long as 30.

If you need short-term mortgage lending on a commercial property, for less than three years, this is deemed a bridging loan.

How are Commercial Mortgages Different from Residential?

Generally speaking, lenders can offer more flexibility when it comes to the mortgage term.

Most residential mortgages run from 25 to 35 years, although commercial lending can be much shorter if required.

Can I Get a Commercial Mortgage with Fixed Rates?

Indeed you can; commercial mortgage lenders usually offer an option between variable rate products and fixed-rate mortgages.

Most lenders offer a fixed rate at a discount from two years, and sometimes for the whole duration of the mortgage term.

In many cases, if your fixed rate ends, it is more economical to look for a refinancing option or remortgage, depending on the standard variable rate offered.

Does the Length of my Commercial Mortgage Term Impact the Interest Rates?

Not really. Lenders consider each commercial mortgage on its own merit, and the length of the term isn't a primary factor when considering what interest rates to offer.

For example, if you compared quotes for a 10-year and 15-year fixed-rate commercial mortgage, the interest rates offered are likely to be similar to those on a 30-year term, if no other circumstances have changed.

However, you will find that the length of the introductory rate can vary. The cheapest overall commercial mortgages are often those with a longer fixed-rate at the start of the term.

How Can I Get the Lowest Commercial Mortgage Interest Rates?

The critical factor when looking for an affordable commercial mortgage is to work with an experienced lender. Independent, whole-of-market brokers such as the Revolution Finance team have access to all lenders across the entire sector and can negotiate competitive deals on your behalf.

Many commercial mortgages are unregulated, which means greater flexibility when it comes to eligibility criteria, but the essential factors include:

  • Business Profits: A lender will look at your business performance and earnings. While there aren't fixed minimum earning levels, they will want to assess whether the company can afford the mortgage.
  • Deposit or Security: Most commercial mortgage lenders look for a deposit from 20% and as high as 40%. You can also offer additional security - this reduces the risk factor and usually means being able to borrow at a higher LTV ratio and achieving lower interest rates.
  • Experience: If you are investing in a property as part of a business plan, a commercial lender may ask about your experience in your industry, how established the business is, and what your projected future performance looks like. Still, some lenders specialise in mortgages for start-ups and new businesses.
  • Credit Rating: Each lender will look at your credit score to carry out a risk analysis. You can work with a niche bad credit commercial lender if the company has suffered any adverse credit ratings in the past.

How Important is the Length of my Commercial Mortgage on the Overall Costs?

The longer your mortgage, the more instalments you make, and the more interest you pay in total. On balance, this does mean a lower monthly payment, which may be the priority.

Our table below considers a commercial mortgage of £400,000, with a 4% interest rate, and how the overall cost changes depending on the length of the term.

Mortgage Term

Monthly Repayment

Total Cost

5-year fixed rate

£7,367

£441,997

10-year fixed-rate

£4,050

£485,977

15-year fixed-rate

£2,959

£532,575

20-year fixed-rate

£2,424

£581,741

25-year fixed-rate

£2,111

£633,404

30-year fixed-rate

£1,910

£687,478

This illustrates how shorter-term costs more per month but overall is a more cost-effective option.

Businesses might choose to pay more in total in return for the lower monthly repayment, as this all depends on your cash flow and capital requirements.

To compare different mortgages, total costs, and calculate monthly repayments, give the Revolution team a call on 0330 304 3040.

Expert Commercial Mortgage Advice

If you are looking for a commercial mortgage, want to compare products, or need advice about the best lenders to apply to, get in contact.

We are available on 0330 304 3040, or via email at info@revolutionbrokers.co.uk.

Check out our handy calculators

Our quick mortgage calculators are designed to give you an indication of how much you can borrow and allow you to consider the different mortgage options available to you.

See what people are saying

We are proud members of the:

Refer, Relax and get £50

If you refer a friend for a mortgage or any type of finance you’ll both receive £25 each when their new application successfully completes.

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Do you have a question?

Call us on 0330 304 3040 or
Click Here to use our online form.