Commercial property mortgage

A commercial property mortgage is credit extended for the purchase or renovation of business real estate—office buildings, retail premises, warehouses, manufacturing facilities, or mixed-use properties. The lender holds a mortgage right on the property as collateral.

Terms differ significantly from residential mortgages: interest rates often reflect market conditions more directly, valuation follows commercial appraisal standards, borrower creditworthiness is assessed on business performance and cash flow, and loan periods may include shorter fixed terms or balloon repayments. Loan-to-value ratios are typically more conservative than consumer lending.