Commercial
Similar to a residential mortgage, a commercial mortgage involves borrowing money to finance a piece of real estate. Only in this case, the property is zoned differently and can be for a multitude of different businesses such as but limited to, industrial building, office unit, retail plazas, mixed-use, warehouses, construction projects and multi unit residential are just some examples of the different types of commercial properties.
Like residential mortgages, every commercial mortgage comes with its own rates, repayment conditions and term. The interest rates are typically higher on commercial mortgages than the rates on residential home mortgages. Additionally, every commercial lender has their own criteria for approving financing. Depending on your risk profile, lenders may ask for higher down payments than they would for residential properties. Mixed properties often require 20% – 35% down, while pure commercial properties are closer to 50%.
The size of a commercial mortgage can vary widely depending on your lender. For example, most traditional mortgage providers, like banks and credit unions have minimum borrowing limits of $500,000 – $1 million. However, some lenders can offer loans as large as $40 million to qualified businesses.
Commercial mortgages also come with other costs, including but not limited to:
| Appraisal fees | Legal fees |
| Lender and/or broker fees | Title and mortgage insurance |
| Environmental Assessment | Building Condition reports |
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