Quoted around 10% for Commercial Loan - is this competitive?

Jaxer

I spoke to a broker in outline terms only, looking for around £150,000 (50% LTV) for a shop/flat property on a self certification route.

He quoted a ballpark rate of around 10%+ which I thought sounded high - but this is the first broker I've spoken to so I don't have anything to benchmark it.

Is this around the going rate?

newsseller12

I have a commercial loan with RBOS for 150K over 10 years for a similar property and am paying approx 8% if that is of any help

toonfish

much depends on the individual case, rent roll etc but I'd expect it to be around 2-2.5% over base so it does sound expensive.

Jaxer

Thats useful feedback. It did sound expensive and the ~2.5% over base sounds more in line with what I'd have expected. I'll keep looking.

worrypants

I ad a commercial mortgage up until september last year it was with Bank of scotland ( not royal)
it was 1.5% ABOVE BOE base rate which at the mo would be 7%


it was for a first time business owner as I had never bought a business before
it was for a freehold pub/restaurant, very risky business:rolleyes:

My broker was Roger Scooling & co based somewhere in wales If i remember rightly, he was excellent. Everything was done over the net and phone.

whole of market with no upfront fee

good luck

AndrewSmith

It is absolutely impossible to say whether the deal is competetive or not based on the information provided.

Commercial mortgage packages are far more 'bespoke' than a residential or buy to let mortgage so no 2 deals are the same.

If you are looking at a purchase or refinance above 75% loan to value then 10% is average. If you are self certifying income or it is your first business and it's above 75% then 10% is again average.

If you have larger than 25% deposit/equity, full business trading history with accounts and clean credit then you should be looking at around 8%.

What are the details of the proposition?