What is a commercial mortgage?
A commercial mortgage is a loan used to buy, refinance, or release equity from business property — such as offices, shops, warehouses, or industrial units. Unlike residential mortgages, they’re tailored to how the property is used and how your business performs financially. Birmingham brokers help local businesses navigate the application process, compare rates, and understand lender expectations. Whether you’re buying your first premises or expanding your portfolio, a broker makes sure the deal suits your business goals and future plans. They also help you avoid unsuitable terms or hidden fees, ensuring your mortgage supports growth, not pressure.
Who can apply for a commercial mortgage?
Any UK-registered business, sole trader, or partnership can apply for a commercial mortgage. Whether you’re an established company, limited business, or even a pension fund purchasing property via a SIPP or SSAS, there are lenders who can help. Birmingham brokers work with businesses across the West Midlands — from high street retailers to light industrial units — and know which lenders cater to different sectors. If you have at least one year of trading history and a clear repayment plan, you may be eligible. Brokers assess your eligibility, advise on deposit size, and help strengthen your case before applying.
What types of property can a commercial mortgage be used for?
Commercial mortgages cover a wide range of property types. This includes offices, shops, restaurants, pubs, warehouses, manufacturing units, and even mixed-use buildings. Some lenders are happy to consider more unusual property — such as dental surgeries, leisure centres, or properties above commercial premises. A Birmingham broker will explain which lenders specialise in your property type and help secure a deal that fits. They’ll also check whether planning permissions, lease terms, or property condition affect your application. The property itself plays a big role in lender decisions — so expert advice is essential to avoid wasting time on the wrong lenders.
How much can I borrow with a commercial mortgage?
Loan sizes typically range from £50,000 to several million pounds, depending on your business finances, the property value, and loan-to-value (LTV) ratio. Most lenders offer up to 70% LTV, meaning you’ll need a deposit of 30%. A Birmingham broker will assess your business’s income, credit history, and projected growth to determine what’s realistic — and which lenders are most flexible. They’ll also explain how rental income (if you’re letting out part of the property) or business turnover supports affordability. Whether you’re buying to occupy or invest, getting a clear picture of your borrowing power is key to planning with confidence.
How long is a commercial mortgage term?
Most commercial mortgages run for 5 to 25 years, depending on the loan size, lender, and your business needs. Some lenders offer interest-only options, while others expect capital and interest repayments throughout. A Birmingham broker will explain how the term affects your monthly repayments, long-term cost, and overall affordability. They’ll also help you factor in business growth, lease arrangements, or expansion plans when choosing your term length. Choosing the right mortgage duration can improve cash flow, support future investment, or reduce long-term interest. Brokers help balance these factors to ensure the term works for your strategy, not against it.
What’s the difference between owner-occupied and investment commercial mortgages?
An owner-occupied mortgage is for businesses buying premises to trade from — like a shop or office you’ll use yourself. An investment commercial mortgage is for buying property to let out, such as a retail unit or business park. The lender’s risk assessment and terms vary depending on the type. A Birmingham broker will help structure the loan based on how you use the property and match you with lenders that specialise in that area. If you plan to do both — occupy part and let the rest — they’ll help explain mixed-use options and how income is treated for affordability.
Can I refinance a commercial property I already own?
Yes — refinancing can help reduce your interest rate, release equity for reinvestment, or switch to more flexible terms. Whether you’re looking to consolidate debt, upgrade your premises, or invest in new stock, a Birmingham broker can guide you through the options. They’ll assess whether it’s worth remortgaging now, check for early repayment charges, and compare deals across the market. They’ll also help with valuations, lease reviews, and lender negotiations. Refinancing can be a powerful tool for business growth — but it needs to be done with clear goals and proper advice to avoid future costs or cash flow strain.
Are commercial mortgage rates higher than residential rates?
Generally, yes — because commercial mortgages are seen as higher risk and tailored to specific businesses. Rates depend on the loan amount, property type, deposit size, and your business’s financial health. That said, the market is competitive, and Birmingham brokers can access rates that reflect your risk profile fairly. They’ll also explain fixed vs variable rates, fees, and total repayment costs. The lowest rate isn’t always the best if it comes with high setup fees or limited flexibility — brokers help you assess value, not just price. With expert support, you can secure a commercial mortgage that fits both your budget and ambitions.
Why use a broker for a commercial mortgage?
Commercial mortgages are complex — with different rules, documents, and risks compared to residential lending. A Birmingham broker understands how lenders assess businesses, what paperwork is required, and how to present your case effectively. They’ll compare multiple lenders, handle negotiations, and flag any red flags early on. Whether you’re buying your first unit or refinancing a property portfolio, a broker makes the process easier and more transparent. They also help avoid delays, costly mistakes, or rejected applications. In short, a broker saves time, adds value, and helps secure finance that supports your business long after the deal completes.
