Commercial Mortgage Loans

Commercial Mortgage Loans: A Guide

Commercial mortgage loans are specifically designed to finance the purchase of property intended for commercial use, expansion of existing business premises, residential and commercial investments, and property development.

Understanding the Difference Between Residential and Commercial Loans

When purchasing property, the distinction between residential and commercial loans hinges on the property's size. Properties with four or fewer units are typically financed through residential loans. However, if the property has five or more units, it qualifies as a commercial loan. Commercial mortgage loans differ from residential loans in various aspects, including interest rates and the assessment process.

Interest Rates for Commercial Mortgages

Commercial mortgage loans generally come with higher interest rates compared to residential loans. This difference is primarily due to the perceived risk associated with commercial loans. Lenders consider commercial loans riskier because the borrower's ability to make repayments is often dependent on the business's performance. Consequently, lenders conduct a thorough evaluation of your business proposal before determining the interest rate.

If your business has a strong track record and demonstrates stability, you are more likely to secure favourable terms on a commercial mortgage loan. These loans are typically available for a standard term of 25 years, though shorter repayment periods, such as 10 years, are also common.

Finding the Right Commercial Mortgage

If you are considering purchasing business property or expanding your current operations, a broker like I Loan Resource can assist in meeting your requirements. We work with top-tier lenders globally, ensuring that you receive transparent information and avoid hidden costs. Whether you need to refinance your home, obtain a new mortgage, or use your equity for debt consolidation, we can help you find the lender that best suits your needs.

For those concerned about poor credit, we offer specialized assistance. By completing our online form, a specialty lender will contact you to explore loan options that align with your financial situation.