Owner-occupier semi-commercial mortgages
Finance for a business that trades from the commercial part of a mixed-use property, sized on your trading affordability rather than third-party rent.
What an owner-occupied commercial mortgage is
An owner-occupier semi-commercial mortgage funds a mixed-use property where your own business trades from the commercial part. A shopkeeper buying the shop they trade from with the flat above, a publican buying their pub with the living accommodation, or a practice buying its surgery with a residential unit all use this finance. The defining feature is that the commercial element is occupied by the borrower's business rather than let to a third party, so the loan is assessed on the business's ability to service the debt, not on rent from a tenant.
Lenders test owner-occupier deals on business affordability and debt service cover, looking at trading accounts, projections and the adjusted profit the business generates. Because you occupy and run the commercial element, lenders see lower risk than a speculative investment, which is why owner-occupier rates typically sit a little below investment rates. The residential element may be let, occupied by the owner or used in connection with the business.
We are a finance arranger and introducer, not a lender. Where an individual borrower will personally occupy the residential element of the property, the loan can fall under FCA-regulated rules, and we refer those cases to a regulated firm. Lending to a business that occupies only the commercial element is unregulated.
- Funds premises your own business trades from
- Assessed on business affordability and debt service cover
- Indicative rates of 6.0 to 7.5 percent a year
- Loan to value up to 70 to 75 percent of value
- Often cheaper than paying commercial rent
Indicative terms
- Loan to valueUp to 70 to 75% of value
- Rate6.0 to 7.5% a year (indicative)
- DepositTypically 25 to 30%
- Term5 to 25 years
- AffordabilityBusiness debt service cover
- OccupancyBorrower's business in the commercial part
Indicative only. Terms vary by lender, property and borrower and are not an offer of finance.
Who it suits
- Business owners buying the premises they trade from
- Publicans and hoteliers with living accommodation
- Retailers buying a shop with a flat above
- Practices buying a surgery or office with a residential unit
Discuss owner-occupier semi-commercial mortgage
A view on lenders and likely terms within one working day.
How owner-occupier lending works
Review the business
We review your trading accounts, management figures and projections to establish the affordability the loan will rest on.
Size on debt service
We model the business's adjusted profit against a debt service cover requirement to set a sustainable loan, rather than sizing on third-party rent.
Place the deal
We approach lenders comfortable with your sector and the owner-occupier model, from high street banks such as NatWest, Lloyds and Barclays to specialists like Allica and Cambridge & Counties.
Valuation and completion
A commercial valuation confirms value, and we manage underwriting, the offer and completion.
Who can get an owner-occupied commercial mortgage
Owner-occupier semi-commercial mortgages suit established businesses and, with a deposit and a credible plan, newer ones. Lenders assess the trading history, the adjusted net profit, the strength of the projections and the owner's experience in the sector. Two to three years of accounts is the conventional benchmark, though some lenders accept a shorter record where projections and sector experience are strong. The business's affordability, not a tenant's rent, drives the loan, so a profitable, stable trading business in sound premises is the strongest case. Personal guarantees from the directors are standard.
How much your business can borrow
Lenders advance up to 70 to 75 percent of the valuation, so you put in a deposit of 25 to 30 percent. The loan size is driven by the business's ability to service the debt, measured by debt service cover against adjusted profit, rather than by rental income. A business with strong, consistent profits and a clear margin over the proposed repayments can borrow toward the maximum loan to value. Where profit is tighter, the loan is sized more conservatively to keep repayments comfortably covered.
Rates, fees and the cost of owning your premises
Owner-occupier semi-commercial rates run from around 6.0 to 7.5 percent a year for mid-2026, typically a little below investment rates because the borrower occupies and runs the commercial element. Expect a lender arrangement fee of roughly 1.5 to 2 percent, a commercial valuation fee and legal costs. Against those, owning your premises replaces rent with a repayment that builds equity, and the interest is usually an allowable business expense. These figures are indicative and not an offer of finance. Tax treatment is a matter for your accountant.
Owner-occupier against semi-commercial investment lending
An investment semi-commercial mortgage is sized on rent from third-party tenants and priced for that risk. An owner-occupier mortgage is sized on your own business's affordability and usually prices lower, because the lender sees an operator with a direct stake in the premises rather than a landlord reliant on tenants. The difference is who occupies the commercial element and how the loan is assessed: business debt service cover for owner-occupiers, stressed rental cover for investors. Buying rather than renting your premises also turns a cost into an asset that builds equity.
Owner-occupier semi-commercial mortgage: common questions
What is an owner-occupied commercial mortgage?
It is a loan to buy premises that your own business will trade from, assessed on the business's affordability rather than on rent from a tenant. On a mixed-use property with a residential element it is an owner-occupier semi-commercial mortgage.
Am I an owner-occupier if I have a mortgage?
Yes. Owner-occupier means your business occupies and trades from the commercial premises, regardless of whether you bought them with a mortgage. The mortgage funds the purchase; you remain the owner-occupier as you repay it.
What should I not tell a lender?
Nothing should be withheld. Lenders need a full and honest view of your trading accounts, projections, existing borrowing and any issues with the premises. Accurate disclosure is what gets deals approved; we help you present the business clearly rather than leaving anything out.
What is the 3 7 3 rule?
It is not a recognised test in UK commercial lending. Owner-occupier loans are sized on business debt service cover against adjusted profit, with loan to value usually up to 70 to 75 percent. We explain exactly how a lender will assess your business.
Can a newer business get an owner-occupier mortgage?
Yes, though most lenders prefer two to three years of accounts. With a strong deposit, credible projections and sector experience, some lenders will consider a shorter trading record.
Discuss owner-occupier 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.