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Commercial Mortgage

A commercial mortgage is a mortgage loan secured by commercial property, such as an office building, business premises, shopping centre, industrial warehouse, or apartment complex.

Lenders generally require a deposit of around 25%-40% of the total value and mortgage terms can run for one year, up to 40 years.

Obtaining a commercial mortgage is based on the ability of your business to make the repayments. You will also find that lenders will assess your business before quoting you an interest rate.  Commercial mortgages are usually also subject to underwriting and due diligence prior to closing. The process may include a financial review of the property and the property owner, as well as commissioning and review of various third-party reports, such as an appraisal.

Banks and lenders generally look at past performance, the current position and long term future plans of the business. The interest rate that will be quoted may be based on these factors and may be higher if the underwriter identifies higher risk in the proposal. You may need to provide a detailed business plan which demonstrates that you can make repayments, and a professional valuation will usually be required.

The key terms in any mortgage loan is: