Commercial Mortgages Top Tips

A commercial mortgage is a loan that is secured on property that is not your residence. Each loan is accessed individually and is priced according to the risk. Commercial mortgages are often on long term basis of between three years to twenty five years. The Commercial Mortgage team has UK specialists who are tailored to assist business owners to choose the best rates on mortgages for commercial property. They provide customer care assistance to customers through a panel of experts, Royal Institute of Chartered Surveyors and ex-bankers from the city who are just a phone call away, and more importantly know how banks work!

It was be most daunting investing in property, but with the right advice and market conditions can be very lucrative. If however the conditions are unstable you do stand to lose money. That is why you should seek experts in this field who will guide you.

mortgage interest rates

The amount of capital raised through commercial mortgage can be used in establishing business premises, buying a fully established business or unlocking tied up capital. The minimum amount of mortgage capital is 25,000 Euros with no maximum amount set. This type of mortgage can be repaid within two years or a maximum of thirty years. This is time enough to enable you to repay the mortgage because the repayment terms are in line with the investment of the borrowed capital. The interest rate on the commercial mortgage can be variable or fixed. It is calculated depending on the risk that the lender perceives. Normally the rate is linked to the Bank of England base rate or Libor. Though the maximum loan valuation is usually until 80% but can exceed this value in some special circumstances. The security for a commercial mortgage consists of a minimum mortgage over the business premises.
Some banks that offer commercial mortgages to businesses may charge the business arrangement fee, the security fee and the valuation fee. Before choosing the institution from which you will take a mortgage, you should first enquire about the services fees as well as the valuation fees and rates. Some banks like Lloyds Bank charge a business early repayment fee if the business pays part or the entire fixed rate mortgage before the end of the agreed period. The early repayment fee could be substantial depending on the interest rate at the time. Norwich and Peterborough Building society in the United Kingdom offer a wide range variety of business mortgages. They offer flexible commercial mortgages that are made up of two parts. 70% of the loan works like a direct capital repayment mortgage to which a fixed or variable rate is applicable. The remaining 30% of the loan is flexible. It works the same way as an overdraft and it can be up to a maximum of 300,000 euros. You can reduce the balance of this part of the loan anytime you want thus you will have to pay less interest.


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