Semi-commercial mortgage – Fund mixed-use property investments
A semi-commercial mortgage is used to buy or refinance property that’s partly residential and partly commercial, such as shops with flats above, pubs with living space or offices with apartments attached.
Funding Options by Tide works with more than 80 UK lenders and has helped over 17,000 businesses secure over £1bn in funding. Compare semi-commercial mortgage deals in minutes.
What is a semi-commercial mortgage and how it works
What is a semi-commercial mortgage?
A semi-commercial mortgage is designed for properties with both commercial and residential elements. They’re sometimes called mixed-use mortgages.
You might use one if you’re:
Buying a shop with a flat above
Refinancing a pub or restaurant with owner’s accommodation
Investing in an office block with residential units
Converting mixed-use property to enhance income
How does a semi-commercial mortgage work?
You apply through a lender or broker with details of the property, rental income and your financial history.
Lenders value both the commercial and residential parts.
Your loan-to-value (LTV) and affordability are assessed.
If approved, you borrow over 5–25 years, either interest-only or repayment.
The terms depend on the proportion of residential vs commercial space, your experience as a landlord or business owner, and the expected rental yield.
Semi-commercial vs commercial mortgages
While both products fund business property, there are key differences:
Semi-commercial mortgage | Commercial mortgage |
Mixed-use property with residential and commercial elements | Purely commercial property such as offices, warehouses, retail or industrial units |
Rental income may come from both tenants and businesses | Rental income typically comes from commercial tenants only |
Slightly higher rates to reflect mixed risk | Broader lender base and lower rates if fully commercial |
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Eligibility criteria
Lenders will look at:
Type and proportion of commercial vs residential space
Expected rental income and yield
Borrower’s credit profile and landlord experience
Loan size, LTV and deposit (typically 25–40%)
Whether it’s an investment or owner-occupied property
Some lenders are more comfortable with retail + residential (e.g. shop with flat) than hospitality (e.g. pub with rooms).
Pros and cons of semi-commercial mortgages
Pros | Cons |
Finance mixed-use properties that residential or commercial-only lenders may not cover | Higher rates and fees than standard residential mortgages |
Potentially diversify rental income from business and tenants | Fewer lenders specialise in mixed-use properties |
Interest-only options available | Larger deposits required (25–40%) |
Terms up to 25 years possible | Valuations can be more complex |
Costs and rates
Rates are influenced by:
Loan-to-value (LTV)
Property type and tenant profile
Borrower’s credit and experience
Market conditions
Expect higher rates than standard residential mortgages, but competitive compared with niche commercial products. Arrangement fees, valuation fees and legal costs also apply.
Alternatives to semi-commercial mortgages
Commercial mortgage
A commercial mortgage essentially lets you spread the cost of purchasing a property, whether that’s a company headquarters or a warehouse. The loan uses the property itself as security and these loan types often come with lower interest rates when compared to something like a short-term business loan.
Buy-to-let mortgage
Designed for rental properties—commercial or residential. The lender focuses on projected rental income to gauge affordability. While potentially lucrative, a buy to let commercial mortgage comes with the risk of market fluctuations in rent demand.
Bridging loans for commercial purposes
for short-term funding or development
Development finance
Ideal for property development or refurbishment projects. A bridging loan for property development can be used to buy land or cover building costs until you can secure a more permanent financial arrangement.
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Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
How to apply with Funding Options by Tide
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Find out more about semi-commercial mortgages
What properties qualify as semi-commercial?
Examples include shops with flats above, pubs with accommodation, restaurants with rooms, or offices with residential units.
How much deposit do I need?
Typically 25–40% depending on lender and property type.
Can I get an interest-only semi-commercial mortgage?
Yes, many lenders offer interest-only terms, particularly for investment purposes.
What’s the maximum term?
Most lenders offer 5–25 years.
Do I need landlord experience?
Some lenders prefer borrowers with experience, but it isn’t always essential—especially if affordability is strong.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Vivek Seda
Business Finance Manager
Vivek is the Asset Based Lending Manager at Funding Options by Tide. Vivek has been in the industry for over 10 years, working for both lenders and brokers. His product specialisms cover Asset Finance, Invoice Finance, Property Finance and structured transactions.