Commercial mortgages are often confused with business loans. However, the two are vastly different in what they are available for and what the lender will be able to help the client with in terms of securing the financing. Thankfully, when you do need to purchase a retail location for your thriving business, there are many different options available to you with a commercial mortgage.

Most often, commercial mortgages work in much the same way as a home mortgage. In the case of a commercial mortgage you will take a loan out, based on your credit and down payment, in order to purchase a space in which to house your business. Additionally, you will be given the option of a ten, twenty or thirty year term on the loan, during which time you will need to make reasonable payments in order to lower the total cost of the loan.

However, when you refinance a commercial mortgage, it most likely won’t be to secure the funds to expand your business. Most commercial refinances are done at the ten or twenty year mark in order to reduce the standard monthly payment and increase the ability to pay the loan off more slowly. In general the refinance rates will be lower for a commercial mortgage with an adjustable rate over a fixed rate because the bank will be able to later hike up the adjustable rate. Currently, the economy is lenient with percentage rates and many banks are offering ARM’s in the 2.5-3.0% range and fixed rate APR’s in the 4.5-4.9% range for most qualified applicants.