Commercial mortgage and best rates

S

SideshowBob

Registered User
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16
Hi,

I owe one of the leading banks 65k of a loan on a Commercial unit worth approx. €250k. I now discover that this loan is not a commercial mortgage but a commercial loan. The interest rate is currently 7% and I note that my repayment has not changed in the last two years since it was taken out.

With the repayment staying contstant and the interest bill hitting on a quarterly basis, I suspect that over the next 13 years I will be pay an exorbitant amount of cash unnecessarily.

Is there any lender that I can go to for a remortgage ( without having to pay 1% of the value of the loan in 'commission' and huge legal fees ? )

What do you recommed I do ( I cant get 65k on top of the value of my house and also wish to keep them separate ).

I see that this bank has me tied into their prime rate + 2%, but I cannot see where they have their prime rate published.... ?

Thanks

Bob
 
Re: Commercial Morgage and best Rates

First go to them and ask them to reduce the rate. Tell them you have a broker who wants you to switch to another lender.

I see that this bank has me tied into their prime rate + 2%, but I cannot see where they have their prime rate published.... ?
Click to expand...

This conflicts with the fact that the rate has not changed in the past two years. The ECB rate is 4%. I assume the prime is a bit higher than this, but ask the bank. I think that the prime rate is the rate which that bank charges its best customers.

I note that you can't remortgage your home. However, if that is at all possible in the future, then that would be the way to go. It's by far the cheapest source of finance.

Brendan
 
Re: Commercial Morgage and best Rates

Interesting that the repayments haven't changed over the last two years.

The majority of Commercial Deals are financed on a margin plus Euribor - which due to the current market volatility is at 4.75%.

So with the best will in the world, on a commercial deal you would be hard pushed to get less than euribor+1.5% to euribor+1.25% depending on the quality of the tennants etc etc.

I honestly think Brendans suggestion of going to your current Lender and negotiating is probably the best.
 
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