Semi-commercial mortgages for mixed-use property

A semi-commercial mortgage (sometimes called mixed-use mortgage) is finance on a single property that combines commercial and residential use. The classic example is the high-street shop with a flat above. Other common configurations include offices over retail, a pub with a manager's flat and letting rooms, a doctors' surgery with a maisonette, a restaurant with a residential annex, or an industrial unit with an associated residential building. Where the property mixes uses, standard residential mortgages will not lend and standard commercial mortgages often price punitively because they do not value the residential element correctly.

Specialist semi-commercial lenders (Shawbrook, Cambridge & Counties, Hampshire Trust, Together, Allica, Norton Home Loans, Aldermore, Foundation, Castle Trust, InterBay) underwrite the property as a single mixed-use asset and apply blended LTVs and ICR tests that respect both income streams. Most active lenders cap at 70-75% LTV, with the keenest pricing typically reserved for properties where 40% or more of the value is residential.

Doulton works across the full semi-commercial lender panel from prime building society products at the residential end through to fully commercial mortgages where the property is largely retail or industrial with a token residential. The right structure depends on the rent roll split, the borrower entity, the planning use class and the exit plan.