Semi-Commercial Mortgages
Semi-commercial mortgages are ideal for people who want to buy a property which has both residential and commercial elements. Here at Ascot Mortgages, we can help you find the best deal for your situation. Why not get in touch today?
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Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
20.06.2025
Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
20.06.2025
What is a semi-commercial mortgage?
A semi-commercial mortgage is a type of loan used to buy or refinance a mixed-use property – where there is a business unit and a residential space in the same building. This could include, for instance, a shop with a flat above it or a residential property where some of it has been converted into a business, for example a pub or a guesthouse.
Regardless of the proportion of residential to commercial, you will need to have a semi-commercial mortgage that combines both elements. This type of mortgage is treated like commercial mortgages and so it is semi-commercial mortgage providers who finance your purchase.
The only exception to this is if the residence has a completely separate entrance, so there is no need to use the commercial element of the property to access it. If this is the case then it may be possible to get two separate mortgages.
Types of semi-commercial mortgages
There are two main types of semi-commercial mortgages:
- Investment – If the property has been bought by an investor with the sole purpose of renting it out to other businesses, it’s an investment mortgage. This tends to be properties such as retail parks, industrial estates and multi-resident office buildings.
- Owner-occupier – Owner-occupier mortgages are for business owners to own and occupy a property that is both residential and commercial. Examples of properties that may have this type of mortgage include retail shops, restaurants and warehouses.
How to apply for a semi-commercial mortgage
Here at Ascot Mortgages, we can help you find the best semi-commercial mortgage deal for your circumstances. Simply follow the steps below:
- Book a consultation – Start by filling in our online form with your contact details and what service you need help with. We’ll be in touch to arrange a free consultation at a time that suits you.
- Compare options – Meet with one of our experienced mortgage brokers to discuss your options. It can be helpful to bring financial documents, such as bank statements, proof of income and credit reports. Once we’ve identified your needs and assessed your situation, we can search the market for the best deals.
- Submit your application – If you’re happy with the mortgage deal your broker has found you, we’ll submit the application for you, taking care of any paperwork. We’ll handle any queries from the lender and will follow up with them if needed.
- Complete the deal – Once the lender has done a property valuation and assessed your financial background, you’ll receive the funds. We’re here for any ongoing advice you may need during your mortgage term.
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Why use an experienced commercial mortgage broker
As with any financial commitment it is prudent to shop around before signing any paperwork. The range of options available can be lengthy and complicated to sift through especially as you are also running, or starting up, a business.
Using an experienced commercial mortgage broker such as Ascot Mortgages to find the most suitable commercial mortgage finance deals can save you the time and trouble of searching through the options yourself. As we are whole-of-market brokers, you get the peace of mind that every possibility has been looked at to ensure we find the very best mortgage for you.
Using Ascot Mortgages will save you all the time it takes filling in application forms, because we can complete all the paperwork on your behalf, presenting you with the best options that you can then choose from.
Our fully-trained advisors pride themselves on giving independent, impartial advice and we offer a no obligation initial quote free of charge. Taking advantage of this offer means that we can advise you on the best semi-commercial mortgages without any commitment from you to proceed.
How much do semi-commercial mortgages cost?
This can vary depending on which semi-commercial mortgage provider you opt for as different lenders will have different fees, costs and repayment terms. In addition to repaying your mortgage, you may need to pay these extra costs:
- Interest – the fee for borrowing money, varies according to the lender
- Arrangement fees – the cost of setting up the mortgage
- Valuation fees – the cost of valuing the property
- Legal fees – the cost of any legal work in the mortgage process.
You will also need to consider the loan-to-value (LTV) of the mortgage. LTV is essentially the percentage of the property value the lender is willing to loan. This means you will need to pay the remaining amount as a deposit.
The repayment period can be spread over a period convenient to you, which could range from three to thirty years. There are two main methods of repayment:
- Interest-only – You only pay the monthly interest on the mortgage but will need to pay the full amount before the end of the repayment period. This can often make the monthly repayment lower, which is particularly useful if you have just set up a business or moved into a bigger unit.
- Capital and interest – You pay both the interest and a portion of the capital each month. This allows you to pay off your mortgage gradually so you own your property at the end of the repayment term.
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Alison Gibson
Ascot Mortgage Expert
Remortgage
Remortgaging is applied when you keep
living in your present property while applying for another mortgage deal with a new lender. Before finding out how to remortgage and get the best offers from experts like Ascot Mortgages, you have to check meeting what parameters of the deal that can help you succeed the most. The range of background factors varies a lot — from the recently changed loan-to-value ratio or your existing agreement coming to an end.
Whether you are trying to get a more beneficial deal or searching for funding to improve your home conditions, remortgaging is one of the most advantageous scenarios to consider.
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FAQ
Semi-commercial mortgages are typically available to those purchasing or refinancing mixed-use properties, such as a shop with a flat above. To qualify for a semi-commercial mortgage, lenders typically look for the following:
- A strong credit history
- Reliable income, whether from employment, self-employment, or other sources
- A solid business plan, if you’ll be operating a business from the commercial part of the property
- A minimum residential property value, often around £75,000 (varies by lender)
- A minimum personal income, usually £25,000 or more for self-employed applicants.
Some lenders may also take into account your experience in managing property or running a business, depending on the nature of the purchase.
Yes, but you’ll need to check whether you’ll need any planning permission or building regulation approvals from your local authority. Once the conversion is complete and legally recognised, you may also be able to remortgage the property with a standard residential or buy-to-let mortgage, which could offer more favourable terms.
The exact amount you can borrow will depend on the property’s value, expected rental income, and your financial circumstances. Most lenders offer loan-to-value (LTV) ratios up to 75%, though some may lend more or less depending on the risk profile and property type. If you have equity in other property(s) some lenders will consider this as additional security and may potentially lend up to 100%.
Valuing a semi-commercial property can be complex, as it involves assessing both the residential and commercial elements. Typically, a qualified surveyor will consider:
- Rental income from both parts of the property, based on current market rates for similar residential and commercial units
- The location, size, age, and condition of the building
- The lease terms
- Any potential for redevelopment or refurbishment, which could increase the property’s long-term value.
If a semi-commercial mortgage isn’t the right fit, there are a few alternatives depending on your needs:
- Buy-to-let mortgages – If the residential part of the property is the primary focus and there is no commercial use, a buy-to-let mortgage may be a better option.
- Bridging loans – A bridging loan is a short-term finance option and may be useful if you need fast funding or are planning to convert the property (e.g. from semi-commercial to fully residential).
- Separate residential and commercial mortgages – If the commercial and residential spaces are completely self-contained with separate access, it may be possible to finance them with two individual loans.
Book your consultation today
If you’re considering a semi-commercial mortgage, Ascot Mortgages is here to offer expert advice and guidance, finding you the best deals on the market. To book a free, no-obligation consultation, get in touch with us today.
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Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £599 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £1299 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
We are a credit broker, not a lender. We work with the whole of the lending market. We may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature any commissions model will be confirmed to you before you proceed.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT
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