---
title: "What is meant by commercial mortgage?"
description: "A commercial mortgage is a type of loan specifically designed for purchasing or refinancing property that is used for business purposes."
url: "https://mortgagelane.com/guides/commercial-mortgages/what-is-meant-by-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 meant by commercial mortgage?

A commercial mortgage is a type of loan specifically designed for purchasing or refinancing property that is used for business purposes.

A commercial mortgage is a type of loan specifically designed for purchasing or refinancing property that is used for business purposes.

[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)

Related definitions

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

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

## What is meant by commercial mortgage?

A commercial mortgage is a type of loan specifically designed for purchasing or refinancing property that is used for business purposes. Unlike residential mortgages, which are for homes people live in, commercial mortgages are used for properties such as offices, retail units, warehouses, factories, or hospitality venues like hotels and restaurants. These loans are typically secured against the property being purchased, meaning the lender can take possession of the property if repayments aren’t made.

Commercial mortgages are commonly taken out by businesses, whether they’re limited companies, partnerships, or sole traders. The loan amounts tend to be much larger than those of residential mortgages, often starting from around £50,000 and going well into the millions depending on the size and value of the property. Loan terms usually range from 3 to 25 years, and interest rates are often higher than residential mortgages due to the increased risk.

There are two main types of commercial mortgages: owner-occupied and commercial investment mortgages. An owner-occupied mortgage is when a business buys premises to operate from, such as a shop, office, or warehouse. A commercial investment mortgage is used when someone buys a property to rent out to other businesses, such as a landlord leasing out a retail unit.

For example, if you run a shop and want to purchase the building your shop operates in, you would apply for a commercial mortgage to help fund the purchase. The mortgage would be secured against the stores premises, and your business would be responsible for making the repayments.

## 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-meant-by-commercial-mortgage