---
title: "What is a Commercial mortgage?"
description: "A commercial mortgage is a type of loan used to buy, refinance, or develop property for business use. Unlike residential mortgages, which are meant for homes people live in, commercial mortgages are designed for properties like offices, shops, warehouses, factories, restaurants, hotels, and other business premises."
url: "https://mortgagelane.com/guides/commercial-mortgages/what-is-a-commercial-mortgage"
site: "Mortgage Lane"
collection: "guides"
date: "2026-08-04"
author: "Written by an adviser at Mortgage Lane"
category: "Mortgage guide"
reviewed: "2026-08-04"
reading_time: "2 min"
byline: "Written by an adviser at Mortgage Lane"
author_credentials: "CeMAP · FCA authorised firm"
language: "en-GB"
robots: "index,follow"
---

# What is a Commercial mortgage?

A commercial mortgage is a type of loan used to buy, refinance, or develop property for business use. Unlike residential mortgages, which are meant for homes people live in, commercial mortgages are designed for properties like offices, shops, warehouses, factories, restaurants, hotels, and other business premises.

A commercial mortgage is a type of loan used to buy, refinance, or develop property for business use. Unlike residential mortgages, which are meant for homes people live in, commercial mortgages are designed for properties like offices, shops, warehouses, factories, restaurants, hotels, and other business premises.

[Commercial mortgage](https://mortgagelane.com/definitions?term=commercial-mortgage)

Commercial

An asset-backed loan secured against commercial, semi-commercial or large-scale investment property, assessed on income sustainability, asset risk and valuation methodology rather than personal affordability alone.

[Read the full definition of Commercial mortgage](https://mortgagelane.com/definitions?term=commercial-mortgage)

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[Commercial Mortgages](https://mortgagelane.com/mortgages/commercial-mortgages)

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[Commercial mortgage](https://mortgagelane.com/definitions#def-commercial-mortgage)

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[Mortgage](https://mortgagelane.com/definitions#def-mortgage)

## What is a Commercial mortgage?

A commercial mortgage is a type of loan used to buy, refinance, or develop property for business use. Unlike residential mortgages, which are meant for homes people live in, commercial mortgages are designed for properties like offices, shops, warehouses, factories, restaurants, hotels, and other business premises.

There are two main types of commercial mortgages. The first is an owner-occupied commercial mortgage, where a business buys a property to operate from, for example, a retail shop or an office space. The second is a commercial investment mortgage, which is used to buy a property that will be rented out to other businesses as a source of income.

Commercial mortgages are usually larger and more complex than residential ones. Loan terms typically range from 3 to 25 years, and the deposit required is often between 25% and 40% of the property’s value. Interest rates are generally higher than residential rates because commercial lending carries more risk and is more bespoke, with lenders assessing the borrower’s business performance, the property’s value, and the income it generates.

These types of mortgages are available to a range of borrowers, including limited companies, partnerships, sole traders, and property investors. Whether you’re purchasing a building for your own company or investing in commercial property to rent out, a commercial mortgage can be a key tool for long-term business growth or income generation.

## Talk it through with an adviser

Speak to a Mortgage Lane adviser about your circumstances and the next steps.

Published: 2026-08-04

Last reviewed: 2026-08-04

Source: https://mortgagelane.com/guides/commercial-mortgages/what-is-a-commercial-mortgage