Understanding the types and terms of mortgages that are available to you as a potential or current business owner is important to planning your long-term business future. A mortgage can actually do more for your business than you might think. Instead of spending money on rent, you could be building equity that can be used to grow your business faster. Let’s explore a few of the mortgage options that may be available to you.
This is one of the more common mortgage types. You will pay a set rate and payment for a term of one to five years. Longer terms are available with some lenders but they are not as common and are never more than ten years. After the term, your rate can increase depending upon the terms of your mortgage. Many banks have a standard variable rate that comes into play after the initial term of the mortgage is complete. This gives you an idea of what your maximum payment will be.
Buy to let
For those wishing to reinvest capital to expand an existing business, a buy to let mortgage can be a great option. If you choose an up-and-coming neighbourhood and buy when prices are low, you can make even more money because rent prices will go up as property values rise. More people than ever are renting, so this type of mortgage is starting to be seen more often than before.
A remortgage can be a good way to make your equity work for you. It is a great option for those that want to expand their business or make other investments. Sometimes, with a remortgage a purchaser can get a better interest rate than they had before. Funds can be used to pay for more production, which can lead to a net profit overall. It is easy to find some of the best remortgage deals. Not taking advantage of opportunities to reinvest the equity you have built with your business can hinder the profitability over time. Don’t miss out on expanding your business and making the most of your money. A remortgage can also be used to pay down higher interest debt and save you a lot of money over the life of the debt. In addition, if you pay down debts, you may be able to just make a single monthly payment rather than a mortgage plus other debts.