A commercial loan is a loan that is taken out by businesses or by financial partnerships for the acquisition of a building or commercial real estate. Often, these are taken out by businesses for the purchase of a new office building, for the expansion of a pre-existing building, or in order to be invested in and eventually resold.
The commercial mortgage loan works much like that of a residential or personal mortgage loan; it is a note that secures an amount of money for the property, and a promise that the amount will be repaid with interest. The collateral, however, in this mortgage is the building. Commercial mortgage rates are an important factor of choosing the right lender, because these are more competitive in nature.
Because commercial mortgages are typically rather expensive endeavors, the commercial mortgage rates are higher. But it is often believed that because these are business ventures, the payments will be repaid in a shorter time frame, evening out the higher interest rates. Though, there are 30 year mortgages, for facilities that take longer to pay off, and might not make substantial revenue.
Commercial mortgage rates for a 30 year mortgage are anywhere between 6.1% to 6.6% interest. 10 year commercial mortgage rates have an average range today of in between 4.7% to 5.3%. There are also floating commercial mortgage rates, which adjust according to the market and the lenders. 30 and 10 year mortgages, are the longer plans, there are shorter ones to fit the needs of businesses as well.