This new product is being offered with an interest rate of three month LIBOR plus between 1.5% and 3% dependent on loan value and length of loan term. The loan term is between five and 25 years and the repayment terms are capital and interest or interest only up to 70% of the loan value.
The mortgage removes a lot of the red tape and restrictions associated with commercial investment mortgages, treating them in much the same way as residential or buy-to-let products. It is available to individuals, partnerships and limited companies based in the UK for the buying and holding of investment property. This mortgage product does not have many of the restrictions typically found in other commercial mortgage products and can be used for both commercial or mixed (commercial and residential) investment including retail, offices, light industrial and warehouses.
Commenting on the product, David Whittaker, managing director of Mortgages for Business, said: “For many years commercial investment mortgages have been subject to unnecessary scrutiny concerning the type of property, the profile of the tenant and of the borrower. This new product does away with all this and offers investors the opportunity of borrowing up to 85% of the investment property value for the first time compared against an industry standard of between 75-80%.”