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Commercial remortgages: what to review before your current deal ends
By Melanie Calvert ·
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A commercial remortgage is an opportunity to review the borrowing against your business premises or investment property. It is not automatically a reason to move lender. The existing lender may offer a suitable route, while switching can involve valuation, legal work and early repayment charges. For Hampshire property owners, the useful starting point is a clear account of what has changed since the loan was arranged. The business, tenancy, property condition or ownership structure may now look different, and the new finance needs to reflect that reality rather than simply chase a headline rate.
Find out what your current agreement actually says Gather the facility letter, recent statement, fixed or discounted period end date and any early repayment terms. Ask the existing lender for the current balance and relevant redemption information rather than estimating from the original loan. Check whether there are review dates, covenants or conditions linked to the property or trading business. A commercial facility can have features that do not resemble a residential mortgage. Give your broker the actual documents and explain any correspondence from the lender so the options can be compared against the agreement you hold.
Review the business or rental income For owner-occupied premises, current accounts and trading information may influence the repayment assessment. For an investment building, the leases, rents, occupancy and tenants need review. A property that has increased in value may still support less borrowing than expected if its income has weakened. The British Business Bank distinguishes these owner-occupied and investment purposes in its commercial property guidance. Update the evidence rather than reusing an old application pack. Explain rent concessions, arrears, voids or significant trading changes, including improvements, so the lender can consider the real position.
Check the property and ownership details Confirm who owns the property, who borrows and who occupies it. A change in company ownership or a connected-party lease can affect the structure. Tell your broker about alterations, new uses, additional units or any outstanding certificates. A lender may require a fresh valuation and legal investigation even if the building has not been sold. The valuer's assessment may differ from an estate agent's opinion. If remedial work or documentation is needed, discovering it early gives you more room to resolve it before the current arrangements change.
Separate refinancing from capital raising Replacing the existing balance and borrowing extra money are related but distinct decisions. Explain what any additional funds will be used for and how they will be repaid. Releasing equity does not mean the property value alone determines the offer: affordability and lender policy still matter. If the purpose is business equipment, compare whether asset finance would fit better. If the aim is substantial development, discuss whether the existing mortgage permits the works. Capital raising should support a considered plan rather than be treated as automatically available spending money.
Compare the whole cost of staying or switching Set the existing lender's option alongside alternatives using the same loan amount, term and realistic holding period. Include arrangement fees, valuation, legal charges and any early repayment or exit costs. Consider fixed versus variable exposure and repayment versus interest-only structures where available and appropriate. A small rate saving can be outweighed by switching costs, while better flexibility may matter if a sale or business change is planned. Ask what happens at the end of any introductory period and whether extra repayments or a future disposal could trigger charges.
Start early enough for the actual work There is no guaranteed completion timescale: underwriting, valuation, lease enquiries and legal work can all take time. Begin the review before an important deal or facility date becomes urgent. Assemble the mortgage documents, financial information, tenancy schedule and any capital-raising plan in one pack. Charles and Melanie can help assess suitable routes and explain what remains conditional at each stage. Our local commercial mortgage guide covers the wider process for Fareham and Portsmouth owners. A well-prepared review can lead to a switch, a new arrangement with the existing lender or a decision to leave the borrowing unchanged.
Explore our finance service and local guide.
Frequently asked questions
Must I switch lender when the deal ends?
No. Review the existing lender’s options as well as alternatives, including the cost and practical implications of changing lender.
Can I raise additional money?
Potentially, subject to value, affordability, loan purpose and lender criteria. Equity in the property does not by itself guarantee approval.
Will the lender need another valuation?
A new lender may require one, and the existing lender may also request updated information. Confirm the requirements rather than relying on the original valuation.
Run the numbers: try our commercial mortgage calculator, then see our commercial mortgage service or book a no-obligation call.
Talk it through
Related reading
- How much deposit do you need for a commercial mortgage?
- Semi-commercial mortgages: buying a shop with a flat above
General information, not personal finance, legal or tax advice. Lending is subject to assessment. Regulatory protection depends on the transaction.