Commercial Mortgages

Whether an investor or an owner-occupier, if your client is buying or remortgaging commercial property we can help. Most property types are considered, and lower rates are also offered where the property attracts a strong yield.

For UK nationals living and working abroad, our new Expat mortgages offer solutions to help your client purchase and refinance an investment property in the UK.

From 1 April 2018, new Energy Efficiency Regulations are being introduced. Click here for more information.

 

Loans up to £1m

Tier 1 and 2 products available on lower yielding, typically better quality properties, based on factors such as property age, location and condition.

Property Yield* Rate 55% LTV 65% LTV 75% LTV
Tier 1 – up to 7% 3 month LIBOR + 4.14% 4.64% 5.14%
Tier 2 – 7% to 8.5% 3 month LIBOR + 4.24% 4.74% 5.24%
Tier 3 – Above 8.5% 3 month LIBOR + 4.74% 5.24% 6.14%

Loans above £1m

Tier 1 products available on lower yielding, typically better quality properties, based on factors such as property age, location and condition.

Property Yield* Rate 65% LTV 75% LTV
Tier 1 – up to 8.5% 3 month LIBOR + 4.14% 4.64%
Tier 2 – Above 8.5% 3 month LIBOR + 4.74% 5.24%

3 month LIBOR is subject to a minimum rate of 0.75%

*Property Yield = ( Market rent ) x 100
Market value (vacant possession)

Expat

If your client is a UK national living and working abroad, an additional 0.50% margin will apply, as will specific lending criteriaAll other fees and product terms remain as standard.

Fixed Rates

Add to variable rate:

2 year fixed Add 0.10%
5 year fixed Add 0.20%

Product Details and Criteria

Location England and Wales
LTV Up to 75%, based on lower of vacant possession value (VP), investment value or purchase price.
Lending against investment value Where certain criteria are met, lending up to 75% of Investment Value can be considered, but cannot exceed 90% of Vacant Possession Value. Please refer to the Key Partner Guidelines on our tools and resources page.
Term 2-30 years
Interest-only Option Normal rates apply if I/O period is 10 years or less. If I/O period exceeds 10 years, 0.5% rate increase applies.
Interest Coverage Ratio (ICR) ICR will depend on the property type and whether or not we are lending to a limited company. 
ICR will apply based on 5%, or the initial pay rate, whichever is higher.
Investment: 125%
Owner occupier: Asset 110% (Market Rent), Borrower 125% (Net profit/EBITDA)
Eligible Applicants Individuals, Limited Companies, LLPs, Partnerships, Trusts and Pension Schemes.
Excluded Property Types All products: The following properties are excluded – Heavy industrial, petrol stations, religious property, hostels, bedsits, equestrian centres, public houses, agricultural properties, catteries, kennels, golf clubs, hospitals, mobile home parks, garden centres, telecommunication masts and all other uses within Classes A4, C2, C2A and D2 of the T & CP Use classes Order 1987, or those properties listed as Sui-Generis.
Sector Experience Standard: Minimum 2 years relevant sector experience
Credit History Good credit history is required – at least 2 years with no adverse credit
Interest Rate Interest rate is margin plus LIBOR (3 month).
Minimum LIBOR is currently 0.75%
If LIBOR reaches 3%, minimum LIBOR becomes 3%.
The start rate is the lifetime floor rate for a loan.
Discretionary rate increases may apply to complex cases.
Fees £130 Administration fee is payable when the valuation is instructed, and is non refundable.
1.50% Arrangement Fee, payable on completion, can be added to the loan and is non refundable. 
Arrangement fee reduces by 0.25% for applicants with a clear 6 month InterBay payment history. 
Early Repayment Charge (ERC) Variable: 3% years 1-5, then 1% for the life of the loan.
Fixed: 4% year 1, 3% for remaining fixed period, then 1% for the life of the loan
10% of the balance can be repaid in any 12 month period, without notice and without incurring ERC.
Expat UK nationals only.
Limited company/LLP applicants acceptable.
Minimum loan £125,000.
Minimum UK equivalent income of £50,000.
Employed applicants must work for a UK, EU, UK agency, or for a recognised and traceable company abroad.
Self-employed applicants must be professional, such as an equity partner in a law firm, professional contractor or a business owner with an internationally recognised accountant.
Self-employed applicants who only have a PO Box Address are not acceptable.
Applicants must have at least two years of UK commercial property ownership experience.
Applicants, including Directors and Shareholders of limited companies, must have a UK credit footprint, with a clean credit history for a minimum of three years.
If an applicant resides in Australia or Monaco, the property must be held in a limited company.
Applicants who live in Saudi Arabia, or who work/reside in any country on a banned or watch list, are not acceptable.
Additional requirements may apply depending on the country of residence, and these will be made clear in any offer document.
Mortgage payment must be by Direct Debit, in sterling from a UK bank.

Related Case Studies

Semi-commercial mortgage

Commercial mortgage