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Commercial Mortgages

We can help you to get the right Commercial Mortgage.

We don’t charge any fees upfront.

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A commercial mortgage is a mortgage loan secured by commercial property, such as an office building, shopping center, industrial warehouse, or apartment complex. The proceeds from a commercial mortgage are typically used to acquire, refinance, or redevelop commercial property.

How to find the best deal
ParaPara.co.uk has over 150 lenders on its panel. You can rely upon us to find you the best deal, since we have extensive knowledge of the market.

What can be offered as security?
Generally lenders take the property you are buying as the only security for the loan, which is typically 70% of the value of the property, and ask for a cash deposit for the balance of the purchase price. If you don’t have the cash you can offer the lender additional security, which is typically other property which you have considerable equity in, but could be a charge over other assets such as an insurance policy or shares.

Can I get a mortgage on a leasehold property?
Only if the lease remaining is more than 70 years, for most lenders, otherwise you will need additional security.

How long are commercial mortgages for?
Commercial mortgages are typically from 3 to 25 years. Shorter term finance is also available and this may be called a bridging loan or property development loan, which you may have from a few weeks up to 24 months.

Are all commercial mortgages variable rate?

No, but most are. Typically a rate will be quoted as X% over base or LIBOR, and this in residential terms would be called a tracker mortgage. Fixed rate mortgages are available and for amounts under £500,000, where the lender takes the rate risk themselves, they may be advantageous.

How much can I borrow?
For owner occupied property you can find a 70-75% mortgage. If it is an investment then the amount you can borrow will be determined by the rental income generated by the investment, but will not exceed 65% of the purchase price. If you are buying a business which includes goodwill, stock etc then the amount available will be further reduced.

Arrangement fees
Whilst arrangement fees are usually added to the loan when it completes, some lenders want some money to cover their work if you don’t accept their offer. In this case they may charge a commitment fee, which is part of the overall arrangement fee, but is payable with your formal application, and is non-refundable. Arrangement fees are typically 1% -2% of the loan amount for loans up to £1 million, with the smaller loans getting the higher rates.

Legal Fees
You will be required to pay both your own legal fees and those of the lender. Again because of the variety of property legal fees will vary with complexity, but start at around £500 for each party. Savings in cost and time can be made where it is agreed that both parties will use different partners in the same firm for representation.