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Commercial Mortgage for Block of Flats: How to Secure Funding for Your Property Investment

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If you’re looking to finance the purchase or refinancing of a block of flats in the UK, then you may require advice from a specialist mortgage broker. We are an independent broker that can provide access to high-value mortgage finance for multi-unit properties. They can arrange commercial mortgages quickly, even if time is of the essence, with short and long-term lending options available from three months.

We have strong relationships with many commercial lenders, as well as private banks, and specialist lenders that are not available on the high street. They can help you borrow up to 75% of the property value, and if you have assets that you would like to be leveraged as part of the transaction, such as your investment portfolio, commercial property, their team can look at leveraging these assets to negotiate more flexible lending criteria and more favourable interest rates.

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Commercial Mortgage For A Block Of Flats Service

Types of Commercial Mortgage

When it comes to commercial mortgages, there are two types of mortgages available in the UK. The first type is an owner-occupier commercial mortgage, which is primarily used by business owners for purchasing commercial owner-occupied premises such as office spaces. The loan-to-value (LTV) ratio for owner-occupier mortgages is generally up to 75%. The second type of commercial mortgage is commercial investment mortgages, which are used by individuals looking to invest in commercial properties such as Houses in Multiple Occupation (HMOs). Lenders usually provide up to 65% LTV for commercial investment mortgages.

Frequently Asked Questions

What Lenders Offer Commercial Mortgages for Multi-Unit Freehold Blocks?

There are several lenders that offer commercial mortgages for multi-unit freehold blocks of flats. These include specialist banks and building societies, as well as some mainstream lenders. Some of the lenders that offer commercial mortgages for multi-unit freehold blocks of flats.

What Factors Determine the Interest Rate for a Commercial Mortgage on a Block of Flats?

The interest rate for a commercial mortgage on a block of flats is determined by several factors. These include the size of the loan, the loan-to-value ratio, the borrower’s credit history, and the lender’s assessment of the risk involved in lending the money. Other factors that may influence the interest rate include the current state of the property market, the lender’s own funding costs, and the level of competition in the mortgage market.

What is the Maximum Loan-to-Value Ratio for a Commercial Mortgage on a Multi-Unit Freehold Block?

The maximum loan-to-value ratio for a commercial mortgage on a multi-unit freehold block of flats varies depending on the lender and the specific circumstances of the borrower. In general, the maximum loan-to-value ratio is likely to be lower than for a residential mortgage, as commercial mortgages are considered to be higher risk. Some lenders may be willing to offer loan-to-value ratios of up to 75%, while others may only be willing to lend up to 60% of the value of the property.

How Do I Calculate the Affordability of a Commercial Mortgage for a Block of Flats?

To calculate the affordability of a commercial mortgage for a block of flats, you will need to consider several factors. These include the amount of the loan, the interest rate, the term of the mortgage, and any associated fees and charges. You will also need to take into account the rental income that the property is likely to generate, as well as any other income that you may have. It is important to ensure that you can comfortably afford the monthly repayments on the mortgage, as well as any other associated costs.

Can I Get a Commercial Mortgage on a Leasehold Block of Flats?

Yes, it is possible to get a commercial mortgage on a leasehold block of flats. However, the process may be more complex than for a freehold block of flats, as the lender will need to take into account the terms of the lease, as well as any restrictions on the use of the property. Some lenders may be more willing to offer commercial mortgages on leasehold properties than others, so it is important to shop around to find the best deal.

What are the Typical Repayment Terms for a Commercial Mortgage on a Block of Flats?

The repayment terms for a commercial mortgage on a block of flats will vary depending on the lender and the specific circumstances of the borrower. In general, commercial mortgages tend to have shorter repayment terms than residential mortgages, with typical terms ranging from 5 to 25 years. Some lenders may offer longer terms, but these are likely to be less common. It is important to choose a repayment term that is affordable and that allows you to repay the loan in a reasonable amount of time.

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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.