Commercial Mortgages Explained: What You Need to Know Before You Buy
- George Christou
- 6 days ago
- 2 min read
If you're considering investing in commercial property—whether it’s a shop, office space, warehouse, or mixed-use unit—a commercial mortgage is likely your route to financing. But these loans differ significantly from the residential ones you might be more familiar with.
At Bournemouth Mortgages, we help property investors and business owners across Dorset and the UK navigate the commercial mortgage market with confidence. Here's what you need to know.
What Is a Commercial Mortgage?
A commercial mortgage is a loan secured against property used for business purposes. There are two main types:
Owner-occupied – where you buy the property for your business to operate from.
Commercial investment – where you let the property to other businesses to generate rental income.
Why Consider a Commercial Mortgage?
A commercial mortgage can help you:
✅ Build or grow a property portfolio
✅ Own your business premises rather than rent
✅ Refinance to release equity
Key Differences from Residential Mortgages
Residential Mortgage | Commercial Mortgage |
Based on your salary/income | Based on the property’s income or business revenue |
Typically fixed-rate, limited options | Rates vary based on risk and deal size |
Lower deposits (5–20%) | Higher deposits (usually 25–35%) |
Simple documentation | More scrutiny, especially for new borrowers |
These differences mean getting advice from a specialist broker is critical.
What Do Lenders Look For?
UK commercial lenders assess risk carefully. Here's what they’ll want to see:
Loan-to-value (LTV) – Most lenders cap at 75% (there is an 80% option)
Property type & condition – Commercial viability matters (they don’t like purchasing an empty shop)
Rental yield or trading income – Can the loan be serviced?
Your experience – Especially important for buy-to-let investors
Credit profile – Both personal and business
Why It Matters More Now
With UK interest rates having increased over the past year, lenders have tightened affordability checks. This means your application needs to be well-prepared and professionally presented.
But—here’s the opportunity:
✔ You can still lock in strong deals with the right lender.
✔ You can restructure existing finance to improve cash flow.
✔ You can spot undervalued assets where others see difficulty.
How Bournemouth Mortgages Can Help
As an independent commercial mortgage broker based in Bournemouth, we:
🔍 Search a wide panel of UK lenders
🧠 Offer personalised strategy (including for SPV purchases)
📄 Handle the paperwork and negotiation
💬 Keep you informed from start to finish
📢 “We do the heavy lifting, so you can focus on growing your portfolio.”
Let’s Talk About Your Next Investment
Whether you're purchasing your first commercial unit or refinancing part of a growing portfolio, our team is here to help.
📍 Based in Bournemouth | 🏢 Serving clients UK-wide
Or call us now on 01202 985214 to get started.