We answer the most common queries regarding borrowing for commercial property

Commercial Mortgages Explained

Types of commercial mortgages

When applying for a commercial mortgage, there are two options. The difference is in the type of interest rate on the mortgage, with a fixed or variable interest rate to choose from.

Fixed interest rate

A fixed interest rate commercial mortgage gives you the security of predictable repayments. As the interest rate is fixed, it means the cost of your repayments won’t change throughout the term. Over the life of the loan, a fixed rate might end up costing you more than a variable rate if interest rates go down. 

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Variable interest rate

Variable interest rate commercial mortgages use a rate of interest that varies in accordance with the NatWest Bank base rate.

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Can you take out a residential mortgage on commercial property?

The simple answer is no, you cannot use a homebuyer mortgage on properties designated for business use. Residential mortgages can only be used for residential properties, not for commercial or mixed-use. As commercial property is higher risk than a home, the rates are tailored to reflect that and differ to those of a residential mortgage.

Can a commercial mortgage be used for a small business?

If you run a small or medium enterprise and you are looking for an SME mortgage to purchase commercial property, a commercial mortgage can be tailored to suit your needs. With a minimum borrowing amount of £25,001 and term lengths up to 25 years, you are welcome to apply as a new or small business.

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Find out more about a commercial mortgage with us

Additional support for your business

Thinking about Business premises?

There are several factors to consider before you decide on your business premises. We could help with the decisions and suggest ways you could finance it.

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Understand commercial re-mortgaging

Commercial re-mortgaging is a refinancing method for mortgages secured against commercial real estate. Find out more about commercial re-mortgaging with us.

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Commercial buy-to-let with NatWest

Commercial buy-to-let mortgages are a type of secured loan, where commercial real estate is the security. Find out more about buy to let mortgages for limited companies.

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