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Retail mortgages
Commercial mortgages for retail properties, including shops, shopping centers, and retail units. These mortgages consider retail market conditions, footfall, and tenant quality.
Reviewed by David Sampson, Founder & Director
What is a retail mortgage?
Retail property mortgages finance the purchase of shops, showrooms and other retail premises. Lenders assess the strength of the tenant covenant, lease length and location, with typical loan-to-value ratios of 60-70% and terms of 5-25 years.
How does a retail mortgage work?
1
Initial Consultation
45-60 minDiscuss commercial property requirements and business plans
2
Business Case Review
3-5 daysAssess financial projections and business viability
3
Full Application
3-5 daysSubmit business accounts, projections and property details
4
Commercial Valuation
2-3 weeksSpecialist commercial property valuation
5
Underwriting & Offer
3-6 weeksDetailed credit assessment and formal offer
6
Completion
6-12 weeksLegal work and due diligence completed
What do lenders look for on retail mortgages?
Borrower profile
- Retail business experience
- Strong financial position and track record
- Professional team and management structure
- Adequate working capital and reserves
- Understanding of retail market conditions
Property requirements
- Suitable property for retail use
- Good location with retail demand
- Appropriate facilities and amenities
- Compliance with retail regulations
- Realistic income potential
What fees come with a retail mortgage?
Arrangement Fee
Commercial facility fee
1% - 2%
of loan amount
Valuation Fee
Commercial property valuation
£1,500 - £5,000
specialist surveyor
Legal Fees
Commercial conveyancing
£2,000 - £5,000
plus due diligence
Broker Fee
Commercial arrangement
0.5% - 1.5%
on completion
Fees vary by lender. Advisers provide a breakdown before you proceed. Mortgage118 does not quote fees.
Resources
Brokers
13 retail brokers in this directory
| # | Broker | Verified | Rating |
|---|---|---|---|
1 | 5.0 (153) | ||
2 | 5.0 (136) | ||
3 | 5.0 (35) | ||
4 | 5.0 (19) | ||
5 | 5.0 (5) | ||
6 | - | ||
7 | - | ||
8 | - | ||
9 | - | ||
10 | - |
Showing 10 of 13 brokers. Compare the full shortlist.
FAQs
What types of retail properties can I get finance for?
Retail finance is available for shops, shopping centers, retail units, high street properties, and other retail premises. The specific criteria and terms vary depending on the property type, size, and location.
What deposit do I need for retail finance?
Retail mortgages typically require deposits of 35-40% of the property value, though this can vary based on your experience, the property type, and the lender's criteria. Higher deposits may be required for new operators.
What experience do I need to operate a retail property?
Most lenders prefer borrowers with previous retail operational experience, though some may consider applications from those with relevant business backgrounds and strong management teams.
Are retail mortgage rates higher than standard rates?
Yes, retail mortgage rates are typically 2-3% higher than standard rates due to the increased risk and operational complexity. Rates may vary based on your experience and the property's performance record.
What are the regulatory requirements for retail properties?
Retail properties must comply with various regulations, including health and safety requirements, planning regulations, and licensing requirements. Lenders will assess your ability to meet these requirements.
Can I get retail finance for a new build property?
Yes, though new build retail properties may require higher deposits and more detailed planning. You'll need to demonstrate that the property meets all regulatory requirements and has appropriate facilities for retail operations.
What happens if footfall decreases?
Lenders expect some variation in footfall and typically require you to demonstrate sufficient reserves to cover mortgage payments during difficult periods. Some lenders may require 6 months' payments in reserve.
Can I get retail finance for a mixed-use property?
Some lenders will consider mixed-use properties with retail elements, though the criteria may be more complex. You'll need to demonstrate that the retail portion meets all requirements and generates sufficient income.
What insurance do I need for retail properties?
Retail properties require specialist insurance including buildings, contents, public liability, and business interruption insurance. The lender will specify the required insurance levels and may need to be named as a beneficiary.
How is retail income assessed for mortgage applications?
Lenders typically assess income based on footfall, rental income, occupancy rates, and operational costs. They'll want to see evidence of stable occupancy and realistic revenue projections based on local market conditions.
Related Articles
Practical guides and explainers from our blog — relevant to this mortgage type.
Mortgage118 is a directory of FCA-authorised advisers, not a lender. We do not publish live rates. Confirm criteria with an authorised broker before you apply.
Important: Your home may be repossessed if you do not keep up repayments on your mortgage. Information on this page is for general guidance only and does not constitute financial advice.Always verify details directly and seek independent advice before making financial decisions.