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Owner Occupied Commercial Property

Updated: Aug 21, 2023

If you are working out of a leased office or working from home and you are looking to change that, this is a great article for you.

Good news... Lenders are incentivising owner occupied loans and some lenders are even allowing people to buy a property with little to no deposit. In most cases, you will have to pay for stamp duty, and they will cover the rest of the loan.


The Loan Structure

Commercial loans come in all shapes and sizes, but we've found over time that owner occupied loans generally come with much larger perks. Your loan structure could be one of the largest decisions you make while setting-up a commercial facility. In most cases, there are three structures that are commonly utilised when undertaking your new acquisition.


The first structure allows you to save and pay a small deposit for an owner occupied commercial loan. This involves saving a 20% deposit plus fees, then putting this deposit down on a commercial premise. This is one of the most common structures.


The second structure allows you to save your capital with a no deposit loan against a 100% owner occupied commercial premise. The catch here is that generally the rate will be higher, and you will be required to reduce the loan over a period of years to 80%. We consider this a fast-track approach, but this can generally be a great fit for a business owner in an overly expensive lease.


The final structure allows you to utilise your home as security for your purchase. This means that you can set-up a no deposit commercial loan, utilising nothing but equity in your property to fund your new acquisition.


Just keep in mind, all that money you might save on a deposit could also be placed in your offset account; multiple lenders are now offering offset accounts on commercial loans, which was never the case in past.


Wondering what our mortgage brokers can offer you? Get in touch with us here at The Newstead Group and we would be happy to answer any questions you may have.




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