Commercial Remortgage
The terms you agreed when you first bought your commercial property don’t have to remain fixed for the life of the loan – as your business grows, your trading history strengthens, or your existing deal comes to an end, refinancing can genuinely improve your position. If you’re looking to remortgage your own home rather than a business or investment property, our Remortgage page covers that residential process instead.
What Commercial Remortgaging Actually Means
A commercial remortgage replaces your existing loan secured against non-residential property with a new agreement, either with your current lender or a different one entirely. The underlying property can be one you trade from yourself or one let to a business tenant – our Occupier Mortgages and Investment Mortgages pages cover how these two structures are assessed differently, and that same distinction carries through to how a remortgage on either is genuinely evaluated.
The Three Main Reasons Businesses Remortgage
Your Existing Deal Is Ending
Commercial mortgage terms are commonly shorter than residential ones, and once yours ends, you’ll move onto your lender’s standard variable rate unless you arrange a new deal – worth reviewing your options well before this happens rather than drifting onto a considerably more expensive rate by default.
Securing a Genuinely Better Rate
If your trading history has strengthened since your original mortgage, or your property’s value has increased, your effective loan-to-value may have improved enough to access meaningfully better rates than when you first borrowed. If interest rates have fallen more broadly, refinancing to a shorter term is sometimes possible without a significant change to your monthly repayment, genuinely reducing your total interest cost over time.
Releasing Equity for Business Growth
Many businesses remortgage specifically to release capital for expansion, a new premises, or other investment. Lenders typically want to see at least 25% equity remaining in the property after any funds are released, so it’s worth understanding your realistic borrowing ceiling based on your property’s current value before committing to a specific plan.
Why Trading History Genuinely Matters Here
Unlike a residential remortgage, where affordability is assessed against personal income, a commercial remortgage looks closely at how your business has actually performed since your original mortgage was arranged. Several years of strong, consistent trading since you first borrowed can genuinely unlock considerably better terms than were available to you as a newer, less established business.
Lease Renewals and Rent Reviews: A Genuinely Commercial-Specific Trigger
For investment properties specifically, a lease renewal, rent review, or change of tenant can meaningfully shift a property’s valuation, since commercial property is often valued against its rental income rather than comparable sales alone. It’s worth reviewing your refinancing options whenever a significant lease event occurs, since this is exactly the kind of moment that can unlock a stronger remortgage than was available previously.
Why Your Business Type Can Narrow Your Options
Some lenders don’t consider certain business types or industries at all, meaning your realistic choice of remortgage provider can be narrower for some sectors than others. Our property-type pages – covering everything from pubs and restaurants to petrol stations and agricultural property – cover the sector-specific lending considerations that apply just as much to a remortgage as to an original purchase.
Documentation You’ll Need
A typical commercial remortgage application requires title deeds confirming ownership, existing lease agreements where the property is let, a current valuation, business accounts demonstrating your ability to service the loan, and compliance documentation including EPC ratings, and gas, electrical, and fire safety certificates where relevant to the property type.
When Remortgaging Might Not Be Worth It
If your existing mortgage term is close to ending naturally, or you’re planning to sell the property relatively soon, the costs of refinancing – valuation, legal, and arrangement fees – can sometimes outweigh the genuine benefit. It’s worth calculating the real total cost of refinancing against your specific timeline before committing, rather than assuming a lower headline rate is automatically worth pursuing.
Refinancing Out of a Bridging Facility: A Different Scenario
It’s worth understanding this distinction clearly: if you’re specifically exiting bridging finance used to fund a development project that’s now reaching practical completion, our Development Exit Finance page covers that particular transition in detail. Commercial remortgage, by contrast, covers refinancing an existing term mortgage, or moving a stabilised property – acquired via bridging for reasons other than development, such as a licensing or condition issue now resolved – onto standard commercial mortgage terms.
Multiple Properties or Facilities
If you’re looking to refinance several commercial properties together, rather than a single site, our Portfolio Mortgages page covers consolidating multiple properties under a single facility, often achieving a more competitive blended rate than several separate remortgages arranged individually.
Why Working With a Broker Matters for Commercial Remortgaging
Given how much rates, criteria, and sector appetite genuinely vary between commercial lenders, and how bespoke each commercial mortgage application is assessed compared with a more standardised residential product, working with a broker who can compare your options across the whole market helps ensure you’re not simply accepting your existing lender’s first offer without knowing what else is genuinely available.
Frequently Asked Questions
How is a commercial remortgage different from a residential one?
A commercial remortgage is assessed against your business’s trading performance and the property’s rental income where let, rather than personal income, and documentation requirements genuinely differ as a result.
How much equity do I need to leave in the property if I release funds?
Most lenders want at least 25% equity remaining after any funds are released, meaning borrowing is typically capped around 75% loan-to-value.
Can a lease renewal affect my remortgage options?
Yes – for investment properties, a lease renewal or rent review can meaningfully change the property’s valuation, since commercial property is often valued against rental income.
What’s the difference between commercial remortgage and development exit finance?
Development exit finance specifically covers refinancing out of bridging used for a development project reaching completion; commercial remortgage covers refinancing an existing term mortgage or a stabilised property acquired for other reasons.
Will every lender consider remortgaging my specific type of business property?
Not necessarily – some lenders don’t consider certain sectors at all, meaning your realistic choice of provider can genuinely narrow depending on your specific property type.
Get in touch with details of your existing commercial mortgage and your plans, and we’ll help you understand whether refinancing genuinely improves your position.
