Commercial Mortgages

We have a team of experts behind us who help to make Commercial Mortgages and purchasing Commercial Property as easy as possible, for either Owner Occupation or Investment.

Our experienced team, has a choice of Bank and Non Bank lenders and our advice is impartial, as we are independent of any lender.

Funding is available (see below) for purchasing Warehousing, Offices, Factories, Retail and Residential/Retail/Business mixed use, subject to:

Owner Occupier

• • Up to 100% funding is possible for really strong applications and the general structure is 65% secured against the Building and a maximum 15 year term.
  • The first 3 to 5 years can be ‘Interest Only’, to aid cashflow. The 35% ‘top up’ is charged on a P&I basis over 3 to 5 years. 
  • To qualify for owner occupied borrowing, a Business must show a strong track and growth record and as a guide, the net profit (this is net plus addbacks, inc current rent, depreciation and one off OPEX costs). 
  • Other factors to consider are the Building must be predominantly Owner Occupied and the Bank quite likes a smaller percentage sub let, as this can aid cashflow. 
  • The minimum NBS is 67% and this is usually verified in the Registered Valuation, which is always required. 
  • Full Financial Accounts are always required. This usually will need to include 3 years annual accounts, 3 way forecasts, year to dates and debtor vs creditor schedule.

Investment

• • The main difference between Owner Occupied and Investment borrowing, is the way the Bank assesses servicing. 
  • The maximum ‘loan to value’ is 65% and can be as low as 50% for specialised assets, such as motels and early childcare facilities. 
  • For investment lending, the Bank uses 2 times the actual interest costs to equal the rental income. 
  • For example, a $2 million property with a 50% deposit gives a loan of $1,000,000 and as of now (December 2022), the interest rate is around 8.5% or $85,000 per annum. 
  • The rent, therefore, needs to be $170,000 for this to work. 
  • In reality most Commercial Investment lending tends to sit around the 30 to 35% ‘loan to value’ mark, to allow for rental to cover. 
  • As a rule, no Financial Accounts are required for this type of borrowing, as the loan is assessed on rental income

The above criteria assumes the security is purely the Commercial Building. 

Different criteria and interest rates can apply if a Residential property is added to the security.

Call to discuss your Commercial Finance options now on 0800 536 337 (0800 LENDER) or Contact Us