Mortgage For Flat Above Restaurant
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Mortgage For Flat Above Restaurant
Sam Bull explains what’s involved in getting a mortgage for a flat above a restaurant.
Can you get a mortgage for a flat above a restaurant?
Yes, there are mortgage lenders who will lend on flats above a restaurant. Not all lenders are going to be happy with these types of properties, as a valuer may not recommend the property as suitable security. That would mainly be due to potential resale issues, should the property have to be repossessed.
Is it possible to get a residential mortgage on a flat above a business or is it only available as a Buy to Let?
There are mortgage lenders who can offer both residential and Buy to Let mortgages on a flat above a business, but not all of them will lend against these types of properties.
We’ll carry out all the necessary upfront due diligence checks on the property, especially around the type of business the flat is above. But yes, both residential and Buy to Let mortgages are feasible.
What affects the lender’s decision in a mortgage application for flats above restaurants?
Mortgage lenders will instruct a valuation of the flat and will rely on the valuer’s comments to determine if they’ll lend against the property. The valuer will consider certain factors, such as if the restaurant will cause noise; if there’s going to be smells or unsociable hours and how waste management works.
All these factors may limit the demand for buyers for these types of flats above a restaurant.
Which lenders will lend me a mortgage on my flat near a takeaway?
Mortgage lenders tend to consider properties on a case-by-case basis. Subject to the valuer confirming the saleability and suitability for mortgage purposes, some high street lenders such as NatWest, Halifax, HSBC and Barclays may consider these types of properties.
There are also specialist lenders such as Vida Home Loans, Bluestone Mortgages and Together Mortgages who can all consider lending on these types of properties.
As always with flats above restaurants or takeaways, we’ll get all the information on the property type up front before making a suitable mortgage recommendation.
What kind of mortgage can I expect for a flat above a restaurant?
We may be able to arrange a high street residential or a high street Buy to Let mortgage for a flat above a restaurant. It will depend on multiple factors, such as the location of the flat, the type of restaurant and the size of the flat.
If you’re purchasing the property as a Buy to Let, the amount of rental income it will achieve will also affect the type of mortgage that you can get. We’ll carry out the due diligence on the property before making an appropriate mortgage recommendation.
How much deposit will I need for a mortgage on a flat above a restaurant or a takeaway?
If you’re looking to buy the property as your residential home, your deposit will range from a minimum of a 5% deposit upwards. If we need to use a specialist lender it may be up to a 40% deposit – this will depend on the property itself.
If the property is a Buy to Let, your deposit will range from a minimum of a 20% deposit up to 40%, depending on the property and the anticipated rental income it could achieve.
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Everyone’s different. You might be self-employed. You might have some credit history issues – whatever your situation, we will find the most suitable product available to you from across the whole market.
How much can I borrow on a mortgage for a flat above a restaurant?
To purchase the property as a residential home, mortgage lenders will generally lend between 3.5 and 5.5 times your total annual income. Some mortgage lenders will lend less than that, some may lend more – it will depend on your personal circumstances.
Things that affect the mortgage size include whether you have any dependents, or if you’ve got any credit commitments such as bank loans, car loans or credit cards.
For a Buy to Let, mortgage lenders use a calculation where the rent needs to cover your interest only mortgage payment at a set interest rate. We’ll carry out those rental calculations for you, because every mortgage lender has a different approach. That will help us make the appropriate mortgage recommendation.
Do I need a guarantor for a mortgage for a flat above a restaurant?
No. You don’t need to have a guarantor for a mortgage for a flat above a restaurant.
Can I get a mortgage for a flat above a restaurant with bad credit?
Yes, we do have mortgage lenders who can consider a mortgage if you have bad credit. We will first of all request a copy of your credit report to understand how recent and how severe your credit history issues have been. Then we will be able to make a suitable mortgage recommendation.
Is there a maximum age at which I can mortgage a flat above a restaurant?
If you’re buying the flat to live in, most high street lenders need residential mortgages to finish by your 70th birthday. In certain circumstances, however, some mortgage lenders have no upper age limit.
If the lender is comfortable with your income past retirement age, they may lend with no age restriction – but only a few lenders will do that.
For Buy to Let mortgages on flats above a restaurant, your age will be less important. The property will be a self-funding investment, and so most lenders have no upper age limit.
How can I get a mortgage for a flat above a shop or restaurant?
These types of properties are quite specialist, so if you do see a flat above a shop or a restaurant that you want to buy, I recommend speaking to a mortgage broker like ourselves.
We’ll be able to give you advice and recommend the most suitable mortgage product available for that particular property.
Your property may be repossessed if you do not keep up with your mortgage repayments.
The Financial Conduct Authority does not regulate most Buy to Let Mortgages.
