Commercial or BTL mortgage???

[steve_chynoweth 1]

Hi all, 

I am looking at a property that has a retail unit on the ground floor and a few flats/maisonettes above and behind. It also has a small 1 bed cottage at the rear. 

My question is... Could I buy this property using a BTL mortgage or do I need a commercial mortgage? Could I buy the whole lot under the one mortgage or would I require separate mortgages? This is virgin territory for me and I would really appreciate some advice. I hope you can help?? 

Thanks in advance, Steve. 

[EvolutionBlogger 81]

The property is mixed use. You need a commercial mortgage 

[steve_chynoweth 1]

Thanks for that, I presume that commercial mortgages are more expensive? 

 

[EvolutionBlogger 81]

Yes they would be. Buy to let mortgages start at 1.5%. The lowest commercial mortgage would have a higher rate

I'm not a broker, but I think that 3-4% is a pretty good rate for a commercial property mortgage

The mortgage rate and valuation of a commercial property is highly dependent on the tenant. You can have two identical properties next to each other, with very different valuations. If you have a 15Y tenancy with Boots, then the value of your property would be much higher

[Stuart Phillips 254]

When you have a small commercial mixed with residential then its possible it might be covered by a semi-commercial mortgage. Lenders like Shawbrook and Landbay have some priducts that cover this, but its also going to depend on the type of commercial. An estate agent will be easier than a betting shop or takeaway for instance.

Whether you go for seperate mortgages is dependant on the title. If its all one then you are limited, if there are multiple titles then yes, potentially you can treat them as independant, but will have to be mindful of the adjacent commercial as many lenders still dont like being next door.

Honestly though, buying something like this without a broker is a minefield, the types of lender you will need are simply not that well known to the public, and a good BTL/Commercial broker will be able to pick this apart and lay out the different approaches with costs so you can make an informed decision. You'll be looking at higher rates than quoted above though.

[steve_chynoweth 1]

Thank you both very much, these answers have given me a lot to think about and I have contacted my broker also. I really appreciate you both taking the time to reply, thanks again.