Refinancing Commercial Property
Find out here how to remortgage your commercial property, how much equity you can release and what your repayments will look like.
What type of commercial property are you looking to mortgage?
Why use us?
At OnlineMortgageAdvisor we know that everyone's circumstances are different. That's why we only work with specialist brokers, who are experts in securing mortgage approvals.
- Specialists in commercial mortgages
- Higher chance of approval
- No impact on credit score
- We don't charge a fee
- Mortgage Approval Guarantee - or £100 back*
- Rated excellent on Trustpilot, Feefo and Google
If you have any questions,
feel free to call us on 0808 189 2301
If your original commercial mortgage term is coming to an end, you may be wondering what happens next.
Here, we look at how commercial remortgages work and if it’s possible to release equity when you refinance.
How do commercial remortgages work?
Commercial remortgages work in similar ways to residential remortgages. When your original mortgage term has come to an end, you can negotiate a new deal with your current mortgage provider or make an application with a new lender. You may want to move lenders to secure a better rate or repayment plan, or fix back in with your current provider to avoid reverting to their standard variable rate, which is usually higher than what you were paying before.
Commercial mortgages are initially agreed on a bespoke, case-by-case basis. Remortgages will be considered in the same way. However, in general, a mortgage provider will run calculations and affordability assessments based earnings before interest, tax, depreciation and amortisation (EBITDA).
EBITDA helps mortgage providers determine whether you or your company will make enough to cover repayments. For example, if you are looking to remortgage an apartment building, your potential provider will want to ensure that any rental income can meet your payment deadlines.
If your net profit from your business is not enough to cover the repayments, some specialist providers may let you use other income as part of your application. As a result, you may be able to borrow more when you remortgage.
Speak to a mortgage expert
Maximise your chance of approval with a dedicated specialist broker
Other criteria you’ll need to meet
In addition to net profit, there are other generic criteria that mortgage providers will investigate – particularly if you are moving providers:
- Business type: Some providers won’t consider specific business types or industries. That may limit the number of providers available to you. You may not, then, have as wide a choice of rates or terms which other industries may enjoy.
- Trading history: If you have built up a number of years trading since you took your commercial mortgage out, and enjoyed a strong track record, you may now be eligible for more favourable rates.
- Deposit, equity and LTV: You’ll already have a deposit when remortgaging a commercial premises, having built up equity in the property. As a result, your loan to value ratio may have improved since you first took out your mortgage. You may now be eligible for better rates with a new product or new mortgage provider.
- Credit History: Your remortgage negotiations won’t immediately be impeded by past instances of bad credit. While providers will often prefer candidates to have a clean credit history, many look at what and when the issue was to determine how risky lending to you could be.
How to remortgage a commercial property
Your first step should be to find a broker who specialises in commercial remortgages. Make an enquiry with us and we will match you with an advisor who fits the bill for free.
Your commercial mortgage broker will guide you through the following steps:
- Calculating your LTV
- Downloading your credit reports/your business’ credit reports
- Finding the right commercial mortgage lenders and securing the best deal
We're so confident in our service, we guarantee it.
We know it's important for you to have complete confidence in our service, and trust that you're getting the best chance of mortgage approval at the best available rate. We guarantee to get your mortgage approved where others can't - or we'll give you £100*
Can you release equity when you refinance?
Yes, you can, though commercial mortgage lenders like to see a minimum of 25% equity left in a property when remortgaging.
Releasing equity is one of the most common reasons that businesses remortgage their properties. If you have built up enough equity in your property, you can take that money out when remortgaging to use elsewhere. You may want to invest the money in another property or pay off debts to improve your business’s debt obligations.
You can also borrow against any increase in value of the commercial property. Doing so means that you realise the gain, borrowing against the higher property price. Again, you can use that cash to invest elsewhere.
What your new repayments will look like
Our commercial remortgage calculator will give you an idea as to what your new payments could be.
Commercial Remortgage Calculator
This calculator can tell you the monthly and overall cost of your mortgage, based on the loan amount, interest rate, and term length.
Your Results:
The monthly repayments on a mortgage would be
The total amount paid at the end of your mortgage term would be
Get started with an expert broker to find out how much they could help you save on your mortgage repayments.
Get StartedSuperb response and knowledgeable advisor
Steve, the financial advisor, contacted me within the hour and was very friendly, knowledgeable and professional. He seemed to relish my non standard requirement, diligently kept me updated during the day and we struck up a great relationship. Very impressed.
Peter Costello
Knowledgeable and Supportive
The team were fantastic and really knowledgeable and supportive. They answered all questions promptly and came back to me with regular updates. I have already recommended them and will use them again.
Dorothy
Prompt and Professional
A very prompt and professional service. The advise and guidance has been so valuable as a first time buyer.
Ayesha
Rated 4.8 out of 5 stars across Trustpilot, Feefo and Google
Who are the best lenders?
There are many specialist providers who will all offer you different terms, payment structures and conditions for a commercial mortgage. For instance, currently The Mortgage Lender, Precise Mortgages or Shawbrook Bank are all examples of lenders who consider commercial mortgage and remortgage applications. The best lender for you will depend on your specific financial situation.
However, whether they are suitable for you, or whether you are eligible for their products, will be contingent on both your needs and their requirements.
Speak to a commercial remortgage specialist
As all commercial mortgages and remortgages are considered on a case by case basis, it can be hard to find a provider offering you the best rates on your own. Yet, getting the best deal possible can materially improve your business’s cash flow and profitability. Lowering your outgoings will mean more money can be invested back into your business.
Using a broker can be invaluable as they have in-depth knowledge of the commercial mortgage and remortgage market. With your remortgage, they’ll know how your circumstances have changed since you first took out the loan. They’ll then determine how those changes have affected your financial situation, putting you in line for specific deals with different lenders.
One of the specialists we work with can help you easily identify and apply for one of those deals. Call us today on 0808 189 2301 or make an enquiry so we can put you in touch with the best commercial mortgage broker for you.
Speak to a mortgage expert
Maximise your chance of approval with a dedicated specialist broker
FAQs
Yes, you can refinance business debt and consolidate it to make the payments more affordable and your business more profitable. To find the best deal for you, it is best to talk with a specialist broker who can help you find the right lender for your needs.
Ask a quick question
We can help!
We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in Commercial Mortgages.
Ask us a question and we'll get the best expert to help.
Get in touch today
Make an enquiry and we'll arrange for an experienced mortgage broker we work with to contact you straight away.
About the author
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!
Pete Mugleston
Mortgage Advisor, MD