Mortgage rates for flats above shops

There are lenders who specialise in these types of properties however the rates are generally more than your mortgages on standard property types. It depends on what type of commercial property is below the flat you’re looking to purchase. A mortgage broker will be able to guide you and recommend the best lender and mortgage product to suit your circumstances.

Why do mortgage lenders consider this type of mortgage application riskier?

The key factor at play is that potential future marketability of the property. Before making decisions in terms of lending, lenders seek assurance that the property can be easily sold in the future, especially if they need to repossess it and recover their costs.

Reselling property situated above or in close proximity to commercial properties tends to be more challenging. The demand is typically lower due things like noise, cooking odours, and potential anti-social behaviour, all of which could discourage prospective buyers.

It’s advisable to carefully consider purchasing a property above commercial premises for similar reasons; living there may not be enjoyable, and selling it might pose challenges.

You do have one major benefit though. These types of properties are usually located in town centres and cities which means you pretty much have all you need and more at your doorstep.

Purchasing a shop and a flat above

There are lenders who wold be happy to provide a mortgage on a shop with a flat above. These types of properties sometimes come with the freehold making the flat a freehold flat. Some properties have the titles already split. Lenders have different appetite’s on lending depending on the situation. 

Buy To Let mortgage flat above shop

Similar to residential mortgages for flats above a shop, buy to let lenders will restrict the size of the flat. There are however more lenders available for a buy to let mortgage flat above a shop. Most lenders will not lend if the flat is above a pub, nightclub and takeaway restaurants due to re saleability being effected. However for investment properties lenders will evaluate the area the property is located in and will consider lending on flats above pubs, nightclubs and takeaway restaurants.

How can we help?

Over the years we have helped many individuals and families secure a mortgage product with no ERCs. We provide advice and recommendations according to your circumstances when obtaining a mortgage. Our advisors assess your circumstances and then advise and recommend according to your needs