What is a semi commercial mortgage?
A semi commercial mortgage is the loan you would take to purchase or remortgage a property that is considered ‘mixed-use’. Put simply, a property that has both a residential and a commercial space.
What is a semi commercial property?
A semi commercial property is a premises that is comprised of both residential and commercial space. You might more commonly hear it referred to as a mixed-use property.
Some examples of the types of property that would be considered as semi-commercial or mixed use would be;
- Off-license with flats above
- Pub with built-in accommodation
- Owner occupied AirBnB
- Restaurant/take-away with flats above
- Any business ran from your home
Can you have a commercial mortgage on a residential property?
If you’re talking about your bog-standard residential property, then no. You can stick with your standard residential mortgage and enjoy the lower interest rates that come with that.
However, there are cases where you would need a semi-commercial mortgage on a residential property. If you run any business operations from your home this would be considered commercial activity and would require a more specialist mortgage.
For example, if you have an at-home beauty clinic.
If you’re unsure whether you need a commercial mortgage your best bet is to speak to someone who knows – aka, us!
Who is eligible for a semi-commercial mortgage?
If you are a business owner that wants to purchase or remortgage a mixed-use property, you will need a semi-commercial mortgage. The same applies for investors who let out mixed use property.
Your actual eligibility will depend entirely on your personal circumstances, financial situation, credit profile and business performance. You’ll need to speak to a commercial mortgage broker to find out whether you are eligible.
Affordability calculations have a significant bearing on how much you are able to borrow. Commercial mortgage lenders would need to be satisfied that the mortgage payments are comfortably affordable based on your EBITDA (earnings before interest, tax, depreciation and amortisation).
In simple terms, your business must be sufficiently profitable.
Can I live upstairs in the mixed-use property?
Yes, you can live in the residential part of your semi commercial property. This will have implications on the loan though as it would make it a regulated transaction which will limit the number of lenders you have the choice of.