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Commercial Mortgage for Property Development: A Comprehensive Guide

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Commercial Mortgage For Property Development

Commercial Mortgages for Property Development

There are several eligibility criteria that you need to meet to get a commercial mortgage for property development. These include:

  • Credit history
  • Business accounts
  • Profit and loss accounts
  • Security
  • Deposit

The loan amount you can borrow will depend on the value of the property and the lender’s Loan to Value (LTV) ratio. Lenders may charge arrangement fees, product fees, and exit fees. The interest rate can be fixed or variable, with capital repayment or interest-only options. Some lenders may also offer capital repayment holidays, prepayment fees, and legal charges.

Frequently Asked Questions

What are the typical interest rates for commercial development finance?

Interest rates for commercial development finance can vary depending on the lender, the project, and the borrower’s creditworthiness. Typically, interest rates for commercial development finance range from 4% to 12%. However, some lenders may offer higher or lower rates depending on the circumstances.

How do lenders assess the viability of a property development project?

Lenders assess the viability of a property development project by looking at several factors, including the location of the property, the borrower’s experience in property development, the overall project plan, and the potential profitability of the project. They may also consider the borrower’s creditworthiness and financial history.

What are the maximum loan amounts available for property development?

The maximum loan amounts available for property development can vary depending on the lender, the project, and the borrower’s creditworthiness. Typically, lenders may offer loans up to 70% of the gross development value, which is the value of the property once the works are complete.

Can I get a mortgage for a commercial property development?

Yes, you can get a mortgage for a commercial property development. Commercial mortgages are specifically designed for commercial property development and can be used to finance the purchase of land, the construction of new buildings, or the renovation of existing buildings.

What are the requirements for obtaining a property development loan?

The requirements for obtaining a property development loan can vary depending on the lender and the project. However, lenders typically require borrowers to have a solid business plan, a good credit history, and sufficient collateral to secure the loan. They may also require borrowers to have experience in property development.

What are the differences between residential and commercial property development finance?

Residential and commercial property development finance differ in several ways. Commercial property development finance typically requires a larger down payment and may have higher interest rates than residential property development finance. Additionally, commercial property development finance may have stricter eligibility requirements and may require more extensive documentation than residential property development finance.

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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.