Semi-Commercial Mortgages

Got an experienced client looking at a property that blends living space with a business? If it’s at least 50% residential and in a good retail location, we can help make it happen.

Key highlights

Loans from £400,000 to £20 million
Loan to value up to 75%
Fixed and variable rates
Loan terms from 5 to 25 years
Capital and interest, part and part and interest only.

Semi-Commercial mortgage rates

Semi-Commercial mortgage criteria

Lending criteria

Type of borrower

Sole traders.
Limited companies.
Limited liability partnerships (LLP).
Individuals and partnerships.

Eligibility

2 years’ experience of managing commercial assets.
Company registered in England and Wales.
All the shareholders and directors must be UK residents.
The company does not need to have a business account with us.

Capital raising purposes

Purchasing another property.
Commercial investment operational purposes.
Property improvements (not including structural or development).

Affordability

Minimum Income Cover Ratio (ICR) of 125% at the higher of the product stress rate or 6%. The rental income used in this calculation must be the lower of passing rent or market rent.
Fixed rate product: minimum Debt Service Cover Ratio (DSCR) of 100% at the higher of 1.40% above pay rate or 7%.
Variable rate product: minimum DSCR of 100% at the higher of 1.25% above pay rate or 7%.

Maximum loan per block or property

£5 million.

Maximum committed term

Up to £2 million: 25 years.
Over £2 million: 10 years.

Interest only

Up to 50% for part and part deals.
Up to a 5 year term.

Asset criteria

Type of property

Mixed use properties including small HMO element or holiday let on the same title.

Location

Must be in a good primary or secondary retail location.

Minimum value per property or unit:

£135,000.

EPC rating

A to C (or D/E with plan to get to C).

Tenancies

Holiday let: short term furnished let, up to 31 consecutive days to the same people.
HMO and BTL: assured shorthold tenancy (AST).
Commercial element: full repair and insure (FRI) lease.

Legal charge

A first legal charge is required.

Personal guarantee

£175,000 or 10% - whichever is higher, from one or more directors.

Valuation

To be completed by a YBS panel valuer and lending based on the lower of:
purchase price
market value
vacant possession value.

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