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100% Commercial Mortgages: Everything You Need to Know

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If you’re in the market for a commercial mortgage, you may be wondering how to secure a 100% mortgage and get the best rate. While it can be tricky, it is possible. In this article, we’ll provide expert insights and guide you through the process of finding the right commercial mortgage for your business needs.

We’ll cover topics such as the types of commercial properties you can mortgage, whether you can get a 100% LTV commercial mortgage, how to get a commercial mortgage with no deposit, and which lenders will consider your application.

Key Takeaways

  • Getting a 100% commercial mortgage is possible, but it can be tricky.
  • Speaking to a mortgage expert can help you find the right commercial mortgage for your business needs.
  • Guarantee the best service by working with a commercial mortgage specialist.

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We can help all Types of Commercial Property Mortgages

If you’re looking to mortgage a commercial property for your business, you have several options to consider. The type of property you’re interested in financing will play a significant role in determining the terms of your loan. You may be looking to mortgage business premises, such as a shop, office block, or restaurant, or you may be interested in financing equipment or machinery. Additionally, you can choose between an owner-occupied mortgage or an owner-occupier mortgage, depending on your business needs. The location and value of the property will also be taken into account.

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Is it possible to get 100% LTV Commercial Mortgage?

While most commercial mortgages in the UK require a high deposit, it is possible to find 100% commercial mortgages with no deposit at all. However, these types of mortgages are not easy to come by and may require you to put up another property or valuable asset as security instead. Most lenders will cap their maximum LTV at 75%, 80% at a stretch if it’s an owner-occupied mortgage. If you’re in the early stages of a new business venture, cash flow is likely to be tight, and a deposit in the range of 25% to 40% can feel impossible.

It’s important to remember that if you do use another asset to secure your new mortgage, you risk losing it should you ever default on the loan. Before deciding on a 100% commercial mortgage, it’s essential to weigh the risks and benefits and ensure that you can make the monthly payments.

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Speak to Our Mortgage Expert

When it comes to securing a commercial mortgage, speaking to a dedicated specialist broker can maximise your chances of approval. They can help you understand your eligibility, provide flexible terms, and guide you through the process of providing evidence such as bank statements, a business plan, and proof of profitability. They can also help with business expansion and credit rating issues. Ask a question and we’ll connect with you.

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How to Get a Commercial Mortgage if You have No Deposit

If you want to secure a commercial mortgage with no deposit, there are a few things you can do to improve your chances of success. Here are three key steps to take:

You Will Use to Another Asset to Secure Your Loan

If you don’t have the cash for a commercial mortgage deposit, you’ll need to have something that can act as security instead. Typically, this would be another property in your portfolio, such as another commercial property or potentially your own home. You’ll need to have enough equity to cover the equivalent of a deposit, either as a first charge if you own the property outright or a second charge if you have an existing mortgage.

If you don’t have another property with enough equity, some lenders may consider business equipment, but many will impose conditions such as a maximum age on the asset or allowing only a percentage of its value to give scope for depreciation. Having someone act as a guarantor could be another option, but that involves a significant risk for them.

Evaluate Other Costs

If you’re applying for a no deposit mortgage because cash flow is tight, remember that there will be other costs involved in getting a commercial mortgage, and you’ll still need to find the money for these. Depending on the size of the mortgage, there will be arrangement fees to factor in, normally between 1-3% of the cost of the loan, as well as legal costs, surveyor and broker fees, and valuation costs. Once the purchase is complete, you’ll also need to think about moving and set up costs.

We Specialise in 100% Commercial Mortgages

A no deposit commercial mortgage is by no means standard, and without a deep knowledge of the market and the many specialist lenders who operate away from the high street, you’ll have trouble finding one who is a good match for you. The only way to be sure you’re getting the product and the rate that’s right for you is to use a broker who specialises in 100% commercial mortgages. They will understand the marketplace and have the contacts and knowledge you need to secure the best mortgage for you.

Make an online enquiry now, and we will get in touch with you.

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We can get you the best available rate.

You deserve complete confidence in our service and trust that you’re getting the best chance of mortgage approval at the best available rate. 

What about the interest rates?

It’s likely that you will pay higher interest rates for a 100% commercial mortgage. The rates are determined by the risk the lender takes on when lending to you. Anything that increases the risk will push up the cost. For example, if the asset is secured as a second charge on a property with an existing mortgage outstanding, you may be offered slightly higher rates, as this involves more risk for the lender.

Can I get lower rates?

If you want to keep rates as low as possible, there are a few things you can do to reduce the risk. One way is to offer some deposit, even if you can’t afford the whole amount. A 90% LTV mortgage with a 10% deposit and a further percentage secured on another asset could open up more lenders and rates. Some lenders may be happy to give you an 80% LTV commercial mortgage with no further security, depending on your circumstances.

Another way to show lenders that you’re a safe investment is to back up your mortgage application with a lot of evidence and planning. This could include thorough business and marketing strategies, evidence of your industry experience, and profitability projections. Anything that will reassure lenders that you are well placed to keep up mortgage repayments.

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Which Lenders Should I approach?

When it comes to 100% commercial mortgages, lenders will consider your application on a case-by-case basis. Specialist lenders and challenger banks are more likely to offer such mortgages than high street banks due to the higher risk involved. Your broker will have existing relationships with many of these lenders and can help find the best deal for your circumstances. It’s important to note that lender criteria can vary widely, so it’s essential to work with a broker who understands the market.

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We Are the Right Commercial Mortgage Specialist

If you’re looking for a commercial mortgage with no deposit, finding a lender who’s willing to consider your application without expert support can be challenging. That’s why it’s essential to find a broker who has access to the whole market and specialist experience in 100% business mortgages.

We can help you find the right commercial mortgage. Our broker who has the expertise to find the loan you need to take your business to the next level. Contact us today to get started.

Frequently Asked Questions

What are the maximum LTV ratios available for commercial mortgages?

The maximum loan-to-value (LTV) ratio for commercial mortgages varies depending on the lender and the type of property. However, most lenders will offer a maximum LTV of around 70-80% for commercial mortgages. Some specialist lenders may offer higher LTV ratios, but this will depend on the specific circumstances of the borrower.

How much can I borrow with a commercial mortgage?

The amount you can borrow with a commercial mortgage will depend on various factors, such as the value of the property, your credit history, and the lender’s criteria. Generally, most lenders will offer commercial mortgages starting from £25,000, with some offering loans of up to £25 million or more. However, the amount you can borrow will also depend on your ability to repay the loan.

What are the requirements for obtaining a commercial mortgage for a new business?

The requirements for obtaining a commercial mortgage for a new business will vary depending on the lender’s criteria. Generally, lenders will require a detailed business plan, financial projections, and evidence of the borrower’s ability to repay the loan. They may also require a deposit, usually between 10-30% of the property’s value, and may ask for additional security, such as a personal guarantee or a charge over other assets.

Which lenders offer the best commercial mortgage rates in the UK?

The best commercial mortgage rates in the UK will depend on various factors, such as the lender’s criteria, the type of property, and the borrower’s credit history. We have access to some of the top commercial mortgage lenders in the UK. We will always compare rates and terms from the whole market lenders to find the best deal for your specific needs.

What is the typical deposit required for a commercial buy-to-let mortgage?

The typical deposit required for a commercial buy-to-let mortgage will depend on the lender’s criteria and the type of property. Generally, most lenders will require a deposit of at least 25% of the property’s value for a buy-to-let commercial mortgage. However, some lenders may require a higher deposit, especially for high-risk properties or borrowers with poor credit history.

Is it possible to obtain a 100% commercial mortgage?

It is possible to obtain a 100% commercial mortgage, but it is rare and difficult to come by. Most lenders will require a deposit of at least 10-30% of the property’s value, and some may require additional security. However, some specialist lenders may offer 100% commercial mortgages under certain circumstances, such as for established businesses with a strong financial track record.

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Legal Information & Disclaimer

This site is an information only site. All of our articles are written by authorised mortgage brokers for the only aim of providing great, useful, mortgage and loan related information. We intent to offer the best possible suggestions and guides however can’t always guarantee to be perfect, please use the information at your own risk. We can’t accept responsibility if things go wrong. Please contact us via our contact page if you see anything that requires changing and we will do so as soon as possible.

The articles on our site do not provide financial advice. Instead, they aim to equip you with the necessary information to attain your mortgage objectives. 

** The content provided in this page is correct at the time of writing. Mortgage and loan lender’s qualifying criteria and rules change frequently so speak to an adviser to confirm the most up to date rules and criteria. The content on the website is not specific advice to each reader, and does not constitute financial recommendations.