Commercial Mortgage Fees and Costs

Estimating the cost of the interest involved with a commercial mortgage is difficult due to the complex lending analysis used to determine the interest rate. Our commercial mortgage calculator will indicate the repayments based on a range of interest rates. As well as the interest an commercial mortgage application will incur several other fees and charges.

Setup / Booking Fees

In some situations the lender may require up front fee before proceeding with the application, this is sometimes the case with smaller businesses or start-ups and is a way to ensure the lender is paid for their contribution even in the event of the application not going through.

Arrangement Fees

A fee the lender will demand for arranging and processing the commercial mortgage, charges vary between lenders and will depend on the lenders incentive but are typically circa 0.5% and 1.5% of the loan amount. Lenders are usually prepared to negotiate depending on the size and involved risks of the application.

Valuation Fees

An unavoidable charge by the lender for arranging and completing the property valuation. Commercial properties tend to warrant more scrutiny resulting in full structural surveys commonly being requested. The amount will vary between lenders and size of the building.

Early Settlement Penalty

Incentivised commercial mortgages are common place usually offered with a fixed or discounted interest rate, in order for the lender to insurance there return they will sometimes enforce a early settlement penalty. The fee tends to be a percentage of the loan amount and will usually in effect for the first two to five years.

Legal Fees

Fees unassociated to the lender for arranging insurance and the preparation of legal documents