Mixed-Use Property Mortgages
- Independent mortgage specialists
- Secure the best mortgage for your circumstances
- Professional, qualified & reliable mortgage advice
Get in touch
Author: Elliott Culley - Director & Mortgage Adviser of Switch Mortgage Finance
Mixed-Use Property Mortgages
Mixed-use property mortgages are designed for properties that combine residential and commercial use under one title. Examples would include properties with separate annexes used for holiday letting, campsites, kennels or shops.
Mixed-use properties are unique, but depending on certain circumstances it could be possible to qualify for a residential mortgage rather than a semi-commercial mortgage.
Can you get a residential mortgage on a mixed-use property?
Yes, it is possible to obtain a residential mortgage on a mixed-use property. Purchasing a property to live in, which for example has separate annexes for holiday letting, is possible on a residential mortgage, provided the overall residential element to the property is 40% or more of the total land.
This can include lots of different types of businesses, such as holiday lets, campsites, kennels or catteries, and consultancy businesses.
If the commercial element is very small, such as one room used as an office, then it’s likely some of the high street lenders may be able to assist. It will depend on the overall picture and the re-saleability of the property in its current condition.
How easy is it to get a mortgage on a mixed-use property?
Getting a mortgage on a mixed-use property can be more complex than a standard residential purchase, but it is very achievable with the right lender. Depending on the complexity of the property you may require a specialist lender. Although these lenders do not offer the best rates on the market, they will still be competitive and far better than semi-commercial rates.
Lenders will look closely at:
- The proportion of residential vs commercial space
- The type of commercial activity
Every property is unique and finding the right lender requires knowledge and experience.
Can I get a mortgage for a house with a self-contained annex?
Obtaining a mortgage for a house with a self-contained annexe is the most common query we come across. If you are wanting to utilise this annexe as a holiday let, rather than your own personal use, whilst living in the main part of the property, then this is possible.
Just one annexe will be fairly simple and you may be able to obtain a mortgage with a high street lender. However if the annexe query is more complex (for example 3 annexes onsite) then this can become more complex, and you will need to ensure at least 40% of the property will be used by you for residential purposes.
How much deposit will I need for a mixed-use property?
For more complex properties it is possible to obtain a mixed-use property mortgage from as low as a 20% deposit. If the commercial element is more minor then you may be able to obtain a mortgage with as little as 5-10% deposit.
What are the rates for a mixed-use property purchase?
Interest rates for mixed property mortgages are usually slightly higher than what you could get if you were buying a standard property. However the rates are competitive, and when you combine the potential extra income from the commercial element you may find this outweighs the slightly higher rates. Provided the land is at least 40% residential you can access these rates rather than commercial rates which would be higher.
Speak to an Expert!
Contact us today for expert advice and guidance on your unique mortgage and property needs. We will work with you on a one-on-one to basis to help you find the right solution for your needs.
With our experience you can rest assured that you are in good hands when it comes to securing the financing you need for your property.
Why Switch Mortgage Finance
- Raising The standards of financial advice
- Making financial advice accessible to all
- Trusted & stress-free financial advice
- Friendly, personable advisors
Can I use the income from the business to support the purchase of the property?
Provided the commercial aspect of the property has financial history, then mortgage lenders can use this towards the affordability of the mortgage. Therefore, when purchasing a mixed-use property, mortgage lenders will consider your current income, alongside potential new income from the business on the land.
The lender will ask questions regarding this, such as if you have any experience in the industry, how will the business be managed once you own the property, and if your current income will be affected by purchasing this property. Before presenting an application to a lender it’s important a detailed plan on how the business will be managed is prepared, so that the application can move forward smoothly.
Can I get a Buy to Let mortgage on a mixed-use property?
Yes, if you are looking at a property to rent then you can obtain a mortgage for a property which has a residential and commercial element to it. If you are looking to buy a mixed-use property to let out then you will need to consider a semi-commercial mortgage.
Most lenders will require 40% or less of the property to be commercial to qualify, although there are some that could go as high as 50%.
You would need at least a 25% deposit for one of these mortgages.
Will I need a semi-commercial mortgage to buy a mixed-use property?
If you are buying the mixed-use property to live in, then you will not need a semi-commercial mortgage, provided 40% or more of the property is residential.
If you are buying the property to let out, then yes, you will require a semi-commercial mortgage.
Speak to a Mixed-Property Mortgage Specialist
Mixed-property mortgages can be complex, but with the right advice, they can be an exciting business opportunity and a way of expanding your income. We are experts in this field and have supported many clients in purchasing mixed-use properties with much more affordable lending.