Semi-Commercial Mortgage
A semi-commercial mortgage funds a mixed-use property - most often a shop, salon or office with flats above - under one facility rather than splitting the building into two loans. Lenders advance up to 75% loan to value on a 3 to 25 year term, price from around 6% to 9% depending on tenant strength and the residential share, and underwrite on interest cover: the combined rent must usually cover the payment by 125% to 145% at a stressed rate. The residential element is what makes these attractive - the whole building is taxed at commercial SDLT rates, which is frequently cheaper than buying the flats alone.
Criteria and pricing
What lenders on our panel will typically do on this product today.
- Maximum LTV
- Typically 70-75%
- Term
- 3-25 years; interest-only and part-and-part available
- Interest cover requirement
- 125-145% at a stressed rate, on combined rents
- Residential proportion
- Most lenders accept up to 60-75% residential by value
- Borrower
- Individual, LLP, trading company or SPV
- Vacant possession
- Considered where a letting plan is evidenced; LTV usually reduced
- Arrangement fee
- Typically 1.5-2%, often added to the loan
- Early repayment
- Fixed periods carry ERCs; trackers are often penalty-free
Worked example - retail unit with two flats above
- Purchase price
- £520,000
- Mortgage at 70% LTV
- £364,000
- Commercial rent
- £18,000 pa
- Residential rent (2 flats)
- £26,400 pa
- Total rent
- £44,400 pa
- Payment at 7.25% interest-only
- £26,390 pa
- Interest cover achieved
- ≈ 168%
- SDLT at commercial rates
- £20,500 vs £34,000+ residential
Figures are typical UK market ranges as at 2026 and are indicative only - your terms depend on the asset, the income, the exit and the lender we place the case with.
Who this works for — and who it does not
You are likely to qualify if
- Deposit of 25-30% plus fees and SDLT
- Evidence of rent: leases, ASTs or a valuer's market rent opinion
- Landlord or trading experience, or a managing agent appointed
- Clean recent credit; historic adverse considered by specialist lenders
This is the wrong product if
- Buildings that are more than roughly 75% residential by value - those route to a portfolio BTL product
- Properties where the commercial unit has been vacant for years with no letting evidence
- Buyers with no deposit expecting 100% funding against value
- Very short leases on the residential flats without a lease-extension plan
What actually happens, and when
- Week 1
Criteria fit
We size the loan against rent, stress rate and the residential split, then confirm which lenders will look at it.
- Week 1-2
Decision in principle
Terms issued and valuation instructed on payment of the fee.
- Week 2-5
Valuation and underwriting
Commercial valuer reports on both elements; underwriters review leases, accounts and the letting history.
- Week 5-10
Legals to completion
Six to ten weeks total is normal for a semi-commercial case; a bridge can complete first if the deadline is tighter.
Frequently asked
Request indicative terms
Four details are all a lender needs to price a case: how much, what secures it, when you need it and how it is repaid. Send those and we come back with realistic terms — or tell you plainly that the case will not place.
Request indicative terms
Tell us the four things every lender asks first. We come back with realistic terms, usually the same working day.