Quick answer: A semi-commercial mortgage is a loan secured on a property that has both commercial and residential parts, such as a shop with a flat above. Lenders assess the commercial and residential elements separately, so the split between the two, the income from each part and your credit file all affect which lenders will consider the case and on what terms. Most straightforward cases complete in six to twelve weeks.
Last reviewed: 29 October 2026. Written by Jaff Sadi, founder and Managing Director of Sadi's Commercial Finance, an NACFB and FIBA member firm based in Chingford, East London.
What is a semi-commercial mortgage?
A semi-commercial mortgage, sometimes called a mixed-use mortgage, finances a building that combines business and residential use. Typical examples are a shop with a flat above, an office with a residential unit, or a block with commercial units on the ground floor and flats on the upper floors. You can use one to buy the property, to refinance it, or to release capital from it.
Owner-occupied or investment?
Owner-occupied: your business trades from the commercial part, and you may live in or let the residential part. Lenders look at your trading accounts and how the property is used.
Investment: you let both parts to tenants. Lenders look at the rental income from each part, the tenancies and the lease terms.
If you are buying through a limited company or SPV, tell us early, because it affects which lenders can help. See our page on commercial mortgages for how the wider process works.
Common mixed-use properties
| Property | What lenders tend to focus on |
|---|---|
| Shop with a flat above | The trade or rent from the shop, the use of the flat and the split of value between the two |
| Office with a residential unit | The commercial income and whether the residential unit is let or occupied by the owner |
| Block with commercial ground floor and flats above | Rental income from each unit, tenancy terms and how the building is managed |
| Pub, restaurant or hotel with living accommodation | The trading business, the accounts and how the accommodation is used |
What do lenders look at on a mixed-use property?
- The split between commercial and residential. The proportion of the value and income that comes from each part affects which lenders will consider the case and on what terms.
- The property. Condition, location, tenure and how easily it could be sold.
- The income. Trading profit for owner-occupiers, or rental income for investments, tested against the mortgage payment.
- Tenancies and leases. Who the tenants are and how long each tenancy or lease has left.
- The borrower. Experience, credit history and the structure holding the property.
- The deposit. How much you are putting in and where it has come from.
Is a semi-commercial mortgage regulated?
Most commercial mortgages are not regulated by the Financial Conduct Authority. Whether a mortgage on a mixed-use property is regulated can depend on how the property is used, in particular whether the borrower or their family will live in the residential part. We will tell you which applies to your case before you commit to anything.
What does a semi-commercial mortgage cost?
We cannot quote a single rate, because lenders price each case individually. Pricing depends on the property, the split between commercial and residential, the loan to value, the strength of the income and the credit file of the borrower and any guarantors. Costs to plan for beyond interest include a lender arrangement fee, a valuation fee and legal fees on both sides. We normally charge a broker fee (our own fee for arranging your finance), but we are not charging it until January 2027 as part of a promotional offer.
How long does it take?
A straightforward case commonly completes in six to twelve weeks from application. Valuation and legal work are the usual bottlenecks, and a mixed-use title can take longer to review. Where a deadline is fixed, such as an auction purchase, bridging finance can complete faster and then be refinanced onto a semi-commercial mortgage.
How to get a semi-commercial mortgage with Sadi's Commercial Finance
- Speak to a specialist. Tell us about the property, how each part is used and your timescale.
- Share the numbers. Provide the deposit or equity available, trading accounts or tenancy schedules, and the structure you intend to buy in.
- Get matched with a lender. We approach suitable lenders from our panel and secure an Agreement in Principle.
- Valuation and legal work. The lender instructs a valuation while solicitors work in parallel.
- Offer and completion. Funds are released on completion.
Why use a broker for a mixed-use property
Lenders differ widely on mixed-use property. Some will not lend where there is a residential element, others focus on the commercial income, and others are comfortable with both. Approaching the wrong lender costs you weeks and can leave a footprint on your credit file. Jaff Sadi spent more than 25 years inside UK high street and commercial banking before founding the firm, so we know how a case needs to be built and presented to get through credit. We compare lenders across a panel of more than 300 UK lenders.
Ready to talk? Speak to a specialist, or read our guide How to Get a Commercial Mortgage in the UK.
Common reasons applications are declined
- The property would be hard to let or sell if the lender had to recover it.
- Trading profits or rent do not comfortably cover the payment once existing commitments are counted.
- Accounts are out of date and no management figures are available.
- The deposit cannot be evidenced, or comes from a source the lender will not accept.
- A short remaining lease on an investment property.
- Adverse credit or arrears that surface during underwriting.
Most of these are fixable if they are dealt with before an application rather than during one. A decline is recorded, and a run of them makes each subsequent lender harder to convince, which is why we approach only the lenders likely to say yes.
Commercial mortgage terms explained
- Loan to value (LTV): the loan as a share of the property's value. A lower LTV usually widens lender choice and improves pricing.
- Debt service cover ratio (DSCR): the test lenders use on investment property to check the rent comfortably covers the mortgage payment, with a margin that varies by lender.
- Covenant: how reliably a tenant can be expected to keep paying the rent.
- SPV (special purpose vehicle): a limited company set up to hold a specific property or group of properties.
- Personal guarantee: a promise by a director or owner to repay if the company cannot.
- Agreement in principle: a lender's initial indication that it is willing to lend, based on the information provided, before valuation and legal work.
- Early repayment charge: a charge for repaying or switching a fixed-rate loan during the fixed period.
- Arrangement fee: a fee charged by the lender for setting up the loan, sometimes added to the loan rather than paid up front.
Frequently asked questions
What is a semi-commercial mortgage?
A semi-commercial mortgage is a loan secured on a property that has both commercial and residential parts, such as a shop with a flat above.
Can I get a mortgage on a shop with a flat above?
Yes. Mixed-use property is financed routinely, though the split between commercial and residential value affects which lenders will consider it and on what terms.
Is a semi-commercial mortgage the same as a buy-to-let mortgage?
No. A buy-to-let mortgage is for residential property let to tenants. A semi-commercial mortgage is for a property with commercial use, usually alongside a residential part, and lenders assess it differently.
Can I buy a semi-commercial property through a limited company or SPV?
Yes. Many lenders are comfortable with limited company and SPV borrowing on mixed-use property. A personal guarantee from the directors is usually required.
Can I live in the residential part?
Sometimes. It depends on the lender and how the property will be used, and it can affect whether the mortgage is regulated. Tell us at the start so we approach the right lenders.
What rates can I expect?
Rates are set lender by lender and case by case, so we cannot quote one. They depend on the property, the loan to value, the income and the credit file of the borrower.
How long does a semi-commercial mortgage take?
A straightforward case commonly takes between six and twelve weeks from application. A mixed-use title can take longer to review.
Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Figures and timescales on this page are indicative and are confirmed only in a lender's formal offer.