What are typical interest rates for buying a commercial property?

Brendan Burgess

Brendan Burgess

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Let's say I wanted to buy a retail property or an industrial unit for €500k.

Assume I have €200k, so I needed to borrow €300k.

What would be the typical terms of such a loan?

I can find buy to let rates online

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Would rates for a non-residential property be higher or lower?

Do they tend to be a fixed margin over euribor?

Brendan
 
Brendan Burgess said:
Would rates for a non-residential property be higher or lower?
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Probably around the same as the higher LTV rates at the moment, but it depends. The key is they're structured differently. Secured agriculture land purchase is somewhere around 6.5% to 7% at the moment if that's an indication.

Anything over c.100k is negotiable, so rates aren't published.

Non residential property tends to be a margin above a banks benchmark rate (whether Prime, cost of funds, EURIBOR, or something else), so would reflect rate changes quicker than other rates.

If you're buying a unit for your own business, the loan structure might be completely different to that of an investor.
 
RedOnion said:
Non residential property tends to be a margin above a banks benchmark rate (whether Prime, cost of funds, EURIBOR, or something else), so would reflect rate changes quicker than other rates.
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That is very helpful, thanks.

So three month euribor is 3.4% at the moment.

So for a 70% LTV loan, what would a typical margin be? 1% , 2%?

If that is a "how long is a piece of string?" what would the typical range be?
Brendan
 
Related to this, are loans on commercial property usually secured against other properties? or is the property to which the mortgage relates the 'security'?
 
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