Commercial Mortgages

It works like a mortgage you already know — a deposit, a term, repayments secured on the property — but the lending decision rests on the business or the tenant rather than on a salary. Commercial mortgages for business or investment purposes are not regulated by the Financial Conduct Authority. That's because the property isn't used as a home. Where a building includes one, the answer can differ — see mixed-use below.

Sometimes it goes higher, depending on the case. What decides it is less the property than what supports the payments — trading profits for an owner-occupier, rent for an investment.

Valuation, legal fees on both sides, lender fees and stamp duty land tax all have to be funded separately. Budget for the whole of it before you commit to a purchase price.

The distinction matters because the lender is underwriting a different thing in each: your accounts and trading history in the first, the lease and the tenant in the second. The same building can be either, depending on who ends up in it.

It sits between two lending categories, which is exactly why it needs placing rather than shopping. It is also the case where the regulated question arises.

Lenders are used to a company borrower, and will usually want personal guarantees from the directors alongside it. Whether owning the premises in the company, personally, or in a pension is right for you is a tax and structure question rather than a lending one — speak to your accountant before you decide, because it is difficult to unpick later.

For an investment, the lease and the tenant: how long is left, what the rent is, and how dependable the tenant looks. For both, the property itself — what it is, where it is, and how readily it could be let or sold to someone else.

Expect to provide a copy of the lease, the rent and when it is reviewed, how long is left to run, any break clauses, and who is responsible for repairs and insurance. A short remaining term, or a break clause coming up soon, may give a lender less to rely on, so it's worth knowing those dates before you make an offer.

Each lender sets its own requirement and tests it in its own way, so the same property can look different to two lenders. We'll check it against the lenders that fit before you apply.

The two things that move it are the valuation and the legals, and neither is fully in anyone's control. If you have a deadline — a lease ending, an auction, a seller's date — say so at the start rather than part way through.

The lender will usually underwrite it much as it would a new purchase, so the accounts or the lease need to be in the same shape they would be for a fresh application.

It's a common part of lending to a limited company, and it is the reason the lending decision is not purely about the company's balance sheet. Its scope may be negotiable — capped, time-limited, shared between directors — and it is worth taking legal advice before signing one.

A mixed-use mortgage can be regulated where at least 40% of the property, measured across the floor areas of each storey, is used or intended to be used as a home. In practice that matters where you or a close family member (a spouse or partner, parent, child, sibling, grandparent or grandchild) live there: where the residential part is let to a tenant, the loan is usually an investment property loan, which sits outside the regulated regime for a separate reason. Borrowing through a limited company sits outside it too, because the test applies to credit provided to an individual or to trustees. It turns on the specific building, who is borrowing, and who lives there, so ask us.

Article 61(3)(a) and 61A, Regulated Activities Order 2001 — checked October 2026

We are also paid a procuration fee by the lender if your case completes, and we will tell you what it is before you proceed.