Mixed-use mortgages
Finance for property that combines commercial and residential use, sized on the rent from both parts and charged stamp duty at the non-residential rates.
What a mixed-use mortgage is
A mixed-use mortgage funds a single property that combines commercial and residential use, which lenders also call a semi-commercial mortgage. The two terms describe the same asset class: a shop with a flat above, an office with residential upper floors, a pub with accommodation, a parade with flats over the units. The mortgage is secured against the whole mixed-use property and sized on the rental income the property produces across both parts.
What counts as a mixed-use property is decided by the commercial to residential split. Lenders measure the split by floor area or value, and the rough rule is that a property with a residential element of around 40 percent or more starts to read as residential, while a genuinely mixed asset sits in the mixed-use or semi-commercial bracket. We assess that split first because it sets the lender list and the terms.
Mixed-use property is charged stamp duty at the non-residential, commercial rates rather than the residential rates. On higher values that is often cheaper than the residential scale, which is one of the reasons the asset class appeals to investors. Stamp duty is an HMRC matter and buyers should take their own advice. We are a finance arranger and introducer, not a lender.
- Funds a property combining commercial and residential use
- The same asset class as a semi-commercial mortgage
- Stamp duty charged at the non-residential rates
- Loan to value up to 70 to 75 percent of value
- Open to individuals and limited company borrowers
Indicative terms
- Loan to valueUp to 70 to 75% of value
- Rate6.5 to 8.5% a year (indicative)
- DepositTypically 25 to 30%
- Term5 to 25 years
- Stamp dutyNon-residential rates apply
- BorrowerIndividual or limited company
Indicative only. Terms vary by lender, property and borrower and are not an offer of finance.
Who it suits
- Buyers of mixed-use property combining shop and flat
- Investors drawn by the non-residential stamp duty treatment
- Limited company landlords
- Owners refinancing an existing mixed-use building
Discuss mixed-use mortgage
A view on lenders and likely terms within one working day.
How a mixed-use mortgage works
Confirm the mix
We confirm the commercial and residential split by floor area and value to establish the property reads as mixed-use rather than residential, and to set the lender list.
Model the income
We total the rental income from the commercial and residential parts and test it against the lender's stressed interest cover ratio to size the loan.
Match the lender
We place the case with a lender comfortable with the property type, whether a high street bank for a clean asset or a specialist such as InterBay Commercial, Together or Cynergy Bank for a more complex one.
Valuation to completion
A commercial valuation sets value and rent, and we manage underwriting, the offer and completion.
Factors that affect getting a mixed-use mortgage
Lenders weigh the building type and location, the strength and lettability of the commercial element, the residential occupancy, your experience and your credit history. A mixed-use property in a strong location with an established commercial tenant and a sound flat above is the easiest to fund. Limited company borrowers are common and welcomed by specialist lenders. The income from the property, both commercial and residential, drives the affordability test, so a property generating two rental streams from a single building often supports a stronger loan than a single-use asset of the same value.
How much you can borrow on a mixed-use property
Lenders advance up to 70 to 75 percent of the valuation, requiring a deposit of 25 to 30 percent. The loan is sized on the combined commercial and residential rental income, stress-tested at an interest cover ratio of typically 125 to 140 percent. Two rental streams from one building, the commercial rent plus the residential rent, often support a higher loan than a single-use property of the same value, and they reduce the impact of a void in either part because the other keeps producing income.
Costs of a mixed-use mortgage
Mixed-use mortgage rates sit at around 6.5 to 8.5 percent a year for mid-2026, with a lender arrangement fee of roughly 1.5 to 2 percent, a commercial valuation fee and legal costs. Against those costs, the non-residential stamp duty treatment can save a meaningful sum on a higher-value purchase compared with the residential scale. These figures are indicative and not an offer of finance. We compare the all-in annual cost across lenders so the headline rate is judged alongside the fees.
Mixed-use against buy-to-let and commercial mortgages
A standard buy-to-let mortgage is for wholly residential property and will not fund a building with a trading commercial unit. A pure commercial mortgage funds wholly commercial premises. A mixed-use mortgage is built for the property in between, sized on both rental streams and usually priced below an equivalent commercial mortgage because the residential element lowers risk. For investors, the non-residential stamp duty treatment and the resilience of two income streams are the features that distinguish mixed-use from a single buy-to-let.
Mixed-use mortgage: common questions
Can you get a mortgage on a mixed-use property?
Yes. A mixed-use mortgage, also called a semi-commercial mortgage, is designed for property combining commercial and residential use. It is sized on the combined rental income and advances up to 70 to 75 percent of value.
What counts as a mixed-use property?
A single property with both a commercial element and a residential element, such as a shop with a flat above or an office with residential upper floors. Lenders measure the split by floor area or value; a residential share of around 40 percent or more starts to read as residential.
What is the 3 7 3 rule?
That phrase is not a standard rule in UK semi-commercial lending. What matters here is the commercial to residential split, the interest cover ratio, commonly 125 to 140 percent, and the loan to value, usually up to 70 to 75 percent. We explain exactly how a lender will assess your property.
How is stamp duty charged on mixed-use property?
Mixed-use property is charged stamp duty at the non-residential rates rather than the residential scale, which is often cheaper on higher values. Stamp duty is an HMRC matter and you should take your own tax advice.
Can a limited company hold a mixed-use property?
Yes. Limited company and special purpose vehicle ownership is common for mixed-use property and well supported by specialist lenders, usually with personal guarantees from the directors.
Discuss mixed-use mortgage
Send us the property details and we will come back with a view on lenders and likely terms within one working day.