Commercial Mortgage Fees and Costs

Introduction

Overview

What We Need to Know

Pros and Cons

Repayments

Types of Lender

Getting a Quote

Interest rates vary according to the lender and the repayment options you choose - see the page in this guide on how the money gets paid back.

Other fees and costs include:

Arrangement or processing fees - these are fees which your lender charges for arranging your mortgage. A typical fee might be in the region of 0.5-1.5 per cent of the loan and is usually negotiable.
Valuation fee - this is the fee charged by the lender for carrying out the valuation of the property, and can vary according to the lender. Further costs are incurred if the lender insists upon a full structural survey to establish the valuation.
Redemption penalty - if you pay off your mortgage early, you may have to pay an additional amount, which is also known as an early repayment penalty. This is usual in the first three to five years of the mortgage, and flexible after that period.
Legal and professional fees - these inevitable expenses include insurance, site survey and preparation of legal documents.

There are certain other factors of which you should be aware:

minimum level for the loan - commercial mortgages are usually only given for substantial amounts, ranging from £15,000 to £500,000, with higher sums in exceptional circumstances
period of grace - some lenders are flexible about late payments, underpayments or payment holidays - but you may incur increased interest charges

GET A QUOTE

If you would like a quotation, please use our Mortgage Quotation Wizard and we will ensure you get the best deal available for your business.

If you prefer to speak to a mortgage consultant, please visit our contact page and use the contact method you prefer, Email, Telephone or Post.

Reproduced with the permission of Business Link (http://www.businesslink.gov)