How are Commercial Mortgage Rates in the UK at the Moment?
There are currently two types of commercial mortgage rates in the UK – fixed and variable. The rates are generally higher than a residential property, namely due to the higher risk a lender faces when providing a mortgage to a business. Deposits are therefore much higher, ranging from 15% to 30%, with lower deposits usually being deemed a higher risk and coming with increased interest rates.
Fixes rates for commercial mortgages remain the same for the entire duration of the loan or for a fixed period, after which they revert to a variable rate. For a variable rate, the amount changes depending on the current base rate from the Bank of England, while other commercial mortgages are also influenced by the base rates.
The base rate in 2018 is 0.5%, with the Bank of England recently deciding to hold the same interest rate to help stimulate growth. This is good news for anyone with a commercial mortgage, as expected changes tend to create a lot of unrest, scaring away many investors due to increases in market prices.