Commercial remortgage: what to prepare before your current deal ends

The date your fixed rate ends and the date your mortgage must be repaid are not necessarily the same. Start by finding both in your documents. A rate change can affect monthly cash flow; a loan maturity can create a much larger repayment requirement.

Commercial refinancing replaces an existing mortgage with a new arrangement. Allica Bank's guidance recommends beginning a review three to six months before a fixed term expires, allowing time for valuation, underwriting and legal work. This is a lender's planning suggestion, not a guaranteed completion timetable. Source: Allica Bank.

1. Put the important dates on one page

Record your fixed-rate end date, loan maturity, any interest-only period ending, notice requirements and the dates on which repayment charges change. Ask the existing lender to clarify anything uncertain in writing.

Then write a single sentence describing your objective. For example: “We want to review the mortgage on our workshop before the fixed rate ends, without increasing the borrowing.” That is a different brief from releasing money for an extension or paying off other debts.

Your timetable should follow the actual agreement and transaction. If maturity is close, tell the existing lender and the professional handling your case promptly. Do not assume a new facility will complete before the deadline.

2. Build a preparation timeline

Keep a list of dependencies beside the dates. A valuation appointment, missing lease or unresolved title question can matter more than how quickly an initial quotation arrives. A quotation is not a completed refinance.

3. Ask why the monthly payment is lower

A lower payment can result from a lower rate, a longer repayment period, an interest-only period or a different amount borrowed. These changes have different consequences.

Illustrative comparison: suppose one hypothetical option costs £4,000 a month and another costs £3,700. The difference is £300 a month, or £18,000 over 60 months. If switching requires £15,000 in additional upfront costs, only £3,000 of that five-year payment difference remains after those costs.

This is a simple cash-flow illustration, not a saving calculation. It ignores payment timing and other charges. You must also compare the outstanding loan balance after five years. If the second option repays less capital, the apparent benefit may be offset by a larger debt.

Ask for a payment schedule and an estimated balance at a common comparison date. Keep added fees, extra borrowing and interest-only periods visible. Do not compare just the first month's payment.

4. Check early repayment charges and break costs separately

Obtain a dated redemption statement or settlement estimate for the intended completion date. Ask whether it includes every applicable charge, how long it remains valid and whether the amount can change.

Allica's published explanation shows that a fixed-rate breakage charge may arise when a borrower repays early or exceeds an overpayment allowance and relevant market rates have fallen. That is one lender's structure; your own offer and agreement determine your position. Source: Allica Bank help centre.

Ask the existing lender to distinguish early repayment charges, any breakage calculation and other redemption costs. Ask the prospective provider which new fees are payable upfront, added to the loan, refundable or non-refundable. Do not assume a single percentage covers everything.

5. Separate property value from usable cash

Property equity is not an approved cash-release figure. As a planning exercise, take a hypothetical £1 million property value and a hypothetical 65% loan-to-value assumption. That produces £650,000 gross borrowing. If £500,000 of existing secured debt must be repaid, the difference is £150,000 before fees, charges and any other deductions.

Change the assumed valuation to £900,000 and the same percentage produces £585,000. The difference after that £500,000 debt becomes £85,000 before costs. The £65,000 change demonstrates why an optimistic valuation can distort the plan.

Neither illustration establishes that 65% is available, that the valuation is acceptable or that the business can support the repayments. Allica identifies both property value and repayment capacity as relevant to a refinance assessment. Source: Allica Bank.

6. Prepare the business story as well as the property file

Create a short summary of what has changed since the existing mortgage was arranged. Has the business grown, lost a contract, changed ownership or taken on other borrowing? Does the property still serve the same purpose?

Ask the professional assessing the case for a document list. Allica's general guidance mentions accounts, recent management information, existing mortgage details and rental information where relevant. Requirements differ by lender and transaction. Source: Allica Bank.

For your own planning, test what happens if turnover falls, a tenant leaves or major repairs become necessary. Record the assumptions and cash buffer. This exercise supports a clearer discussion; it does not replace the provider's affordability assessment.

Questions to take into the next conversation

• What happens under the existing agreement if we do nothing?
• Are we approaching a rate change, an interest-only period ending or loan maturity?
• What is the total cost of changing on our intended date?
• How much capital remains at the same comparison date under each option?
• Which valuation, legal and underwriting conditions remain outstanding?
• What security or guarantees are required, and what is at risk?
• What happens if the refinance is delayed?

A commercial remortgage should begin with a defined objective, dates and a complete comparison. Read Bene's commercial mortgage guide and valuation guide for related preparation.

For a UK limited-company business requirement, you can contact Bene Finance. Bene acts as an introducer and does not give mortgage, legal or tax advice, compare mortgages or make lending decisions. Availability and terms depend on the relevant provider. Commercial borrowing may be secured against property; failure to meet repayments can put that property at risk.