Commercial mortgages are a complex process and there are many things to consider when deciding whether it’s the best choice for your business. To help you understand what commercial property mortgage rates are and how they work, read on.
Commercial Property Mortgages
Commercial property mortgage rates are not consistent in the same way as residential mortgages. Generally with commercial property rates, the higher the number of years in a loan, the higher the interest rate, while the residential property rates, the higher the number of years of a loan equals a lower interest rate.
When a business applies for a commercial mortgage, a lending underwriter assesses the risk level of the proposed finance. Generally, you will find that each rate is tailored to match the strength of the deal and the property involved.
There are many factors that can influence the rates for commercial mortgages, such as:
- The experience of the company or individual
- The track record of the company or business owner
- The commercial property itself
- The industry sectors
- The strength and performance of the current business or the business that is being considered
Generally, commercial mortgages from specialist lenders will be more flexible with their criteria and can lend up to 75 percent loan to value (LTV).
Most of the time with commercial rates, you get terms with a lower number of years than with residential rates. For example, it’s easy to acquire a 30-year term. With an apartment loan, you will likely have terms of 3, 5, or 7 years, even 10 years, although over 10 years is uncommon.
Do you have questions about commercial property mortgage rates? At Fidelity Mortgage Lenders, we’re here to help. Contact Peter directly on PSteigleder@FidelityCA.com or give him a call on 818.422.8879.