Semi-commercial mortgages
Term finance for property that mixes a commercial unit with residential accommodation, from a shop with a flat above to a parade with uppers.
What a semi-commercial mortgage is
A semi-commercial mortgage is a term loan secured against a property that has both a commercial element and a residential element under one title. The classic example is a shop with a flat above, but the same finance covers an office with flats on the upper floors, a pub or guest house with living accommodation, a surgery with a residential unit, and a retail parade with residential uppers. Lenders treat these as semi-commercial rather than residential or pure commercial, which is why a standard high street mortgage rarely fits.
The question every lender asks first is the split between the commercial and residential parts, measured by floor area or by value. A widely used rule of thumb is that if the residential element is roughly 40 percent or more of the property it tends to be treated as residential, while a genuinely mixed asset sits in the semi-commercial bucket. We work out where your property falls before we approach anyone, because that judgement decides which lenders will look at it and on what terms.
We are a finance arranger and introducer, not a lender. Semi-commercial finance for business and investment borrowers is unregulated lending, outside the FCA's regulated mortgage perimeter. Where an individual borrower will personally occupy the residential element, the loan can fall under FCA-regulated rules, and we refer those cases to a regulated firm.
- Funds property with a commercial unit and residential accommodation under one title
- Indicative rates of 6.5 to 8.5 percent a year for mid-2026
- Loan to value typically up to 70 to 75 percent of the valuation
- Sized on combined commercial and residential rental income
- Available to individuals, partnerships 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
- Affordability125 to 140% ICR on combined rent
- BorrowerIndividual, partnership or limited company
Indicative only. Terms vary by lender, property and borrower and are not an offer of finance.
Who it suits
- Investors buying a shop with a flat above
- Landlords holding mixed-use property
- Limited company SPV borrowers
- Owners refinancing a parade with residential uppers
Discuss semi-commercial mortgage
A view on lenders and likely terms within one working day.
How we arrange the finance
Assess the split
We work out the commercial to residential split by floor area and value, which decides whether the property reads as semi-commercial and which lenders will consider it.
Size the loan
We model the combined commercial and residential rental income against a stressed interest cover ratio, usually 125 to 140 percent, to set a realistic loan amount.
Place with the right lender
We approach the desks most comfortable with your property and borrower type, from high street names to specialist semi-commercial lenders such as Shawbrook, InterBay Commercial and Allica.
Valuation and offer
A commercial valuation confirms value and rent. We manage the lender through underwriting to a formal offer and on to completion.
Who lenders will consider
Semi-commercial mortgages are open to individuals, partnerships and limited company borrowers, including a special purpose vehicle set up to hold the property. Lenders look at the commercial element and how readily it lets, the strength of the residential element, your experience as a landlord or operator, and your credit history. A limited company holding the asset is common and well understood by specialist lenders. The property itself matters as much as the borrower: a lettable ground floor commercial unit with a sound flat above is straightforward, while a vacant or hard-to-let commercial part needs a lender comfortable with that risk.
How much you can borrow against the property
Most lenders advance up to 70 to 75 percent of the valuation, so you need a deposit of 25 to 30 percent on a purchase or that much equity on a refinance. The loan is sized on the combined rental income from both the commercial and residential parts, tested against a stressed interest cover ratio of typically 125 to 140 percent. Where the commercial rent is strong and the residential flat is let, the rental income usually supports the maximum loan to value. Where the commercial unit is vacant, the loan is sized more cautiously on the residential income alone until the unit lets.
Rates, fees and the cost of borrowing
Semi-commercial mortgage rates run from around 6.5 to 8.5 percent a year for mid-2026, depending on the loan to value, the borrower and the quality of the commercial element. Expect a lender arrangement fee of around 1.5 to 2 percent, a commercial valuation fee that reflects the size and complexity of the property, and legal fees on both sides. These figures are indicative and not an offer of finance. We set out the full cost of each option so you can compare the headline rate against the fees and the overall annual cost.
Semi-commercial against residential and commercial mortgages
A residential mortgage will not fund a property with a trading commercial unit, and a pure commercial mortgage is designed for wholly commercial premises priced and underwritten on business use. A semi-commercial mortgage sits between the two, built for mixed-use property and sized on the combined income. It is usually cheaper than a comparable commercial mortgage because the residential element reduces the lender's risk, and the asset is charged for stamp duty at the non-residential rates, which can be lower than residential rates on higher values. Stamp duty is an HMRC matter and buyers should take their own advice.
Semi-commercial mortgage: common questions
What is a semi-commercial mortgage?
It is a term loan secured against a property with both a commercial unit and residential accommodation under one title, such as a shop with a flat above. Lenders size it on the combined commercial and residential rental income rather than on a standard residential basis.
What is the deposit for a semi-commercial mortgage?
Typically 25 to 30 percent of the property value, since most lenders advance up to 70 to 75 percent loan to value. A stronger commercial element and a let residential flat can support the higher end of that range.
What should I not tell a lender?
You should never withhold or misstate anything a lender asks for. Disclose the full position on the commercial tenant, the residential occupancy, any planning issues and your other borrowing. We help you present the case accurately, which is what underwriters reward, rather than leaving anything out.
Can I borrow through a limited company?
Yes. A limited company or special purpose vehicle holding the property is common for semi-commercial lending and well understood by specialist lenders such as Shawbrook, InterBay Commercial and Allica. Directors usually give a personal guarantee.
How is the loan amount worked out?
Lenders combine the commercial and residential rental income and test it against a stressed interest cover ratio, commonly 125 to 140 percent. The lower of that figure and the maximum loan to value sets the loan.
Discuss semi-commercial mortgage
Send us the property details and we will come back with a view on lenders and likely terms within one working day.