Are there any restrictions or fees?

Restrictions may apply to any property that is used to secure a loan (in the absence of a full deposit). Some lenders will value the property according to its remaining equity (as opposed to market value), while damaged properties or those unlikely to sell are often disregarded. In addition, leaseholds with less than 70 years remaining may necessitate additional security.

There are also a number of additional fees associated with commercial mortgages. These include:

• Arrangement fees: These are usually charged upon completion of the loan at a rate of 1-2% of the borrowed amount (although they can be higher on loans less than £1 million).
• Valuation fees are charged against a borrower’s application and vary according to how complex the report is. Simple valuations start from around £500.
• Legal fees: These are paid by the borrower in respect to both the lender’s legal fees and their own. These will vary according to each case but can start at around £500 for each party.
• Broker fees usually amount to up to1% of the loan value.
• Stamp Duty, though lower for commercial properties, still needs to be taken into account.