Commercial Mortgage Finance

Yes, you can use a commercial mortgage to refinance an existing property. However, it is important to consider whether refinancing is the best option for you as there may be other financial benefits of holding onto your current loan. For instance, if you have a fixed-rate loan, refinancing could mean losing this benefit and being exposed to increased interest rates. Additionally, there may be costs associated with refinancing such as early repayment fees or legal and administrative costs. Therefore, it is important to speak to a financial advisor before making any decisions. They can provide further advice on your individual circumstances and help you determine whether refinancing is the right choice for you.

When applying for a commercial mortgage, it’s important to understand what factors lenders consider when assessing your application. Generally speaking, lenders will assess things like:

• Your current financial situation – this includes your income, asset value and other debts;
• Your credit history – this helps lenders determine whether you have been able to meet your current financial obligations;
• The location of the property – lenders may consider factors such as local market conditions and rental demand when assessing a commercial mortgage application;
• The type of property you’re looking to purchase – this includes things like the size, condition and purpose (i.e. whether it is residential or commercial).

It’s important to note that different lenders may prioritize these factors differently and may have specific criteria unique to their lending policies. Consult us and we will provide personalised guidance and help guide you through the commercial mortgage application process.

Yes, there can be tax benefits associated with a commercial mortgage. Here are a few common tax benefits that business owners may enjoy: 

• Mortgage Interest Deductions: Interest paid on the commercial mortgage is generally tax-deductible as a business expense. This means that the interest portion of your mortgage payments can be subtracted from your business’s taxable income, potentially reducing your overall tax liability.
• Capital Allowances: Capital allowances allow businesses to claim tax relief on certain qualifying expenditures related to commercial property. This includes items such as fixtures, fittings, and equipment within the property. By claiming capital allowances, you can deduct a portion of the qualifying costs from your taxable profits, reducing your tax liability.
• Depreciation: Commercial properties are subject to depreciation, which allows business owners to account for the wear and tear of the property over time. Depreciation expenses can be claimed as deductions against taxable income, reducing the amount of tax owed.
• VAT Reclaim: If the commercial property is VAT registered, businesses may be able to reclaim the Value Added Tax (VAT) paid on the purchase price or certain costs associated with the property. VAT reclaims can result in significant tax savings for businesses.

It’s important to note that the specific tax benefits and allowances can vary based on factors such as the nature of the property, business structure, and individual circumstances. Tax laws and regulations are subject to change, so it’s advisable to consult with a qualified tax professional or accountant to understand the current tax benefits and implications associated with a commercial mortgage in your specific situation.

The approval process for a commercial mortgage typically ranges from 4 to 8 weeks, but the duration may be longer if the purchase is more complex.