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Commercial mortgage

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A commercial mortgage is a loan given to a business to buy a commercial property.

Commercial mortgages are different from residential mortgages in a number of ways, including the following:

  • The loan-to-value ratio may be lower for a commercial mortgage, meaning less of the total value of the property is covered by the loan.
  • The interest rate on a commercial mortgage is higher than on a residential mortgage.

Commercial mortgages are usually amortized over a period of 20 years or more and repaid in regular instalments.

Related definitions

Find out more in our glossary

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Free eBook: Buying commercial real estate

Get your step-by-step guide to purchasing a place of business so you can understand whether it’s the right move for your company, who can steer you through the process to avoid common pitfalls, and what you can do to budget, negotiate and finance your purchase effectively.

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