How much will a bank loan on commercial property?
Sarah Garza
Updated on March 14, 2026
How much can I borrow for a Commercial Loan? On a commercial property, banks generally lend up to 65% of the value of the property or the purchase price. It is possible to get additional loan towards the commercial property by offering the banks other assets in security such as your home or investment property.
Can you mortgage commercial property?
Traditional commercial mortgage Like a residential mortgage, a commercial loan is secured by the property being purchased. Beyond that, terms can vary by the lender. Some banks will make fully amortized loans with long terms up to 20 years and loan-to-value ratios typically up to 80%.
What is the typical term for a commercial mortgage?
Unlike residential loans, the terms of commercial loans typically range from five years (or less) to 20 years, and the amortization period is often longer than the term of the loan. A lender, for example, might make a commercial loan for a term of seven years with an amortization period of 30 years.
What is the current interest rate for commercial loans?
Average commercial real estate loan rates by loan type
| Loan | Average Rates | Typical Loan Size |
|---|---|---|
| SBA 7(a) Loan | 5.50%-11.25% | $5 million (max) |
| USDA Business & Industry Loan | 3.25%-6.25% | $1 million+ |
| Traditional Bank Loan | 5%-7% | $1 million |
| Construction Loan | 4.75%-9.75% | $3 million+ |
How does a commercial property loan work?
Technically, commercial real estate loans are mortgage loans secured by liens on the commercial real estate you’re purchasing—rather than on residential property. Before funding your loan, major lenders will typically require a down payment between 20 – 30% of the property purchase price.
What is the commercial mortgage rate?
Average commercial real estate loan rates by loan type
| Loan | Average Rates | Typical Max. Term |
|---|---|---|
| USDA Business & Industry Loan | 3.25%-6.25% | 30 years |
| Traditional Bank Loan | 5%-7% | 10 years |
| Construction Loan | 4.75%-9.75% | 36 months |
| Conduit (CMBS) Loan | 3.04%-4.60% | 30 years |
What is the difference between a commercial mortgage and a residential mortgage?
The main difference between a commercial mortgage and a residential mortgage is that the value of the land or property is usually much larger. As a commercial mortgage is any loan secured on property which is not your residence, buy to let mortgages are a special type of commercial mortgage as well.
What can a commercial mortgage be used for?
A Commercial Mortgage is a loan that’s secured against a commercial property. Our Commercial Mortgage product can be used to purchase new commercial premises for businesses to trade from, or to remortgage an existing loan that’s secured against an existing property, to raise finance for your business.
What’s the difference between a commercial and home loan?
There are usually no fixed rates for commercial mortgages; You’ll usually pay a higher interest rate on commercial mortgages compared to regular home mortgages as these are considered higher-risk to lenders; Commercial mortgages tend to offer better interest rates than regular business loans as these require property as collateral
How big of a mortgage do you need for a commercial property?
Take advantage of opportunities to buy or refinance income-producing property, with a commercial mortgage that provides funding over $750,000. Ready to Apply? Financing multi-residential (minimum 7 rental units), industrial, office or retail property
What’s the interest rate on a commercial property loan?
If the property needs more active management such as a motel, the rate can increase. Depending on the establishment and type of financing, commercial mortgage rates typically range between 1.176 percent up to 12 percent. Commercial real estate loans are fairly considered illiquid assets.
