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.