IMB Blog

Commercial Mortgage Finance

If you’re looking for a commercial mortgage in Leeds or further afield within the UK. Then we have some handy hints and tips to help and guide you through the process. Taking on any commercial mortgage can be an exciting but daunting time for you and your business. Commercial mortgages in Leeds are especially designed for businesses and business owners who are based in Leeds, but Independent Mortgage Brokers are able to broker mortgages for the whole of the UK. They’re the next step up from business loans, used in situations where you want to buy a commercial property and are seeking a mortgage to do so. As the commercial mortgage market can be a very complex one, it certainly would be prudent to consider the support of a commercial mortgage specialist to help you navigate the commercial mortgage market.

Commercial Mortgage Basics

Commercial mortgages are basically a loan taken out by a business owner against business for the purpose of buying an existing property or for the development of a new property.

The two basic types of commercial mortgage are:

  • An owner-occupier mortgage this is when a business is buying a property to trade from
  • A commercial investment mortgage, where the business is purchasing a property for a purely investment purpose.

When searching for commercial mortgages it is important to understand the deposit requirements and interest rates will undoubtedly be higher than for a traditional vanila residential mortgage.

Exploring the types of commercial mortgages that you may want?

In the main there are two specific types of commercial mortgages

  1. The first is where the business becomes an owner-occupier commercial mortgage where the business would be looking to buy a property to trade from.
  2. The Second is a commercial investment mortgage, If the business is purely seeking to make an investment in commercial property and maybe the business wants to let it out to a third party (This may then be viewed as commercial buy-to-let).

Whichever option you and your business opt for will definitely have an impact on the type of commercial mortgage available. It will also have an impact on the rates the business may qualify for. Taking on a commercial mortgage is extremely complex and certainly not for the faint hearted. Without doubt the best advice we could give is to seek the support of a commercial mortgage specialist to help and guide you through this market.

Commercial Mortgage Deposits

You absolutely need to know, whatever type of commercial mortgage you are looking for, you will need to have a substantial deposit behind you to assist you in the funding of your commercial mortgage deal. Commercial mortgages in Leeds for businesses are likely to need a deposit of around 25% to 40%, in some cases your business may be able to use other properties they may have to provide further security, On the assumption that there is sufficient equity within the other asset or assets. There are lots of different options when it comes to commercial mortgage rates the commercial mortgage lender may offer multiple different options for you to choose from such as variable rates discounted tracker and fixed rates. Commercial mortgage terms may also be quite generous typically from 3 years to as many as 40, however 15 to 30-year terms are for some reason more commonly applied for. There may also be shorter term commercial property finance which may also available, this is commonly referred to as a property development finance or bridging loan. Again, these options would be better advised after speaking with a commercial mortgage broker.

How could I obtain a commercial mortgage in Leeds?

Obtaining a Commercial Mortgage or business mortgage is based on the tradability of the business. You will not only need to be confident that your business can cover the monthly repayments, but you can also prove the business is able to support the borrowing to any future lending organisation. You absolutely will need to provide a comprehensive business plan which will need to demonstrate that the business is viable and more than able to make the monthly repayments. When taking on a commercial mortgage for the first time you will need to retain the services of a professional valuer, who will complete a valuation of the property which will definitely be needed before a commercial mortgage would be granted.

Making the most of the commercial mortgage deals available

If you retain the services of a specialist independent mortgage broker when you start the process, you shouldn’t have much trouble in getting yourself a commercial mortgage. Although if you were to look yourself and try to acquire your commercial mortgage through a high street lender, maybe NatWest, Halifax, Barclays or Santander amongst others, you may have to switch your everyday business banking accounts to the new commercial lender in order to achieve the best terms/rates. Although it may be a good idea to approach a specialist commercial lender who won’t want your business banking account at all, in addition they may be able to offer interest-only payment terms as well as commercial mortgages with much lower deposit requirements, there is an obvious trade-off that means that rates could be higher than a high street lender.

How much can I borrow for my commercial mortgage?

This is a big question which will undoubtedly depend on the type of commercial property finance you’re looking at. If it’s for owner-occupied property, you may be able to source a commercial mortgage deal at up to 70-75% loan-to-value (LTV), on the assumption that you are able to provide the necessary deposit and prove that your business will not be affected as a result of you taking on this finance. The affordability assessment will be very robust too, which realistically means the amount you are able to lend will usually be dictated by the amount of deposit you initially put down.

It will be considerably different when it comes to a commercial investment mortgage. Here, the amount you’ll be able to borrow will depend on the expected rental income generated by the investment, but even so, the commercial mortgage deal will typically not exceed 65% of the initial purchase price. In some situations, it may be possible for you may be able to find a deal with a lower deposit amount, however without doubt you’ll be required to provide significant collateral instead.

If you’re considering taking on a commercial mortgage in Leeds or any other part of the UK for that matter, then we definitely recommend you talk to a commercial mortgage specialist. Talking to independent mortgage brokers based in Halifax could be your solution to your commercial mortgage requirements. We found Independent Mortgage Brokers a 5-star rated excellent on Trustpilot whilst doing our research for this article and found this company very knowledgably an approachable when we discussed commercial mortgages. They specialise in finding the right deals for their clients and have a great track record in obtaining great commercial mortgage deals for each of their clients. Based in Halifax Yorkshire, they service the whole of the UK and set up mortgages At Independent Mortgage Brokers they provide commercial mortgages for all types of businesses, such as commercial finance for factories, offices, retail premises such as shops or takeaways or even public houses, clubs, restaurants and other hospitality venues. They even set up commercial mortgage deals for buy to let properties. They are easily contactable and have a wonderful website to provide even more information. but if you’re looking for someone to help and assist you with your commercial mortgage in Leeds then give the dedicated brokers a call on 0333 210 0082. They are certain to help you through the process.


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Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of our Independent Mortgage Brokers to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisers working for or with Independent Mortgage Brokers are fully qualified to provide mortgage advice and authorised and regulated by the Financial Conduct Authority. All our independent Mortgage Brokers will offer advice specific to you and your needs and circumstances. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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