Much like Home Mortgage Loans, Commercial Building Mortgage Loans are available in both Adjustable Rate and Fixed Rate Mortgages.
Interest rates for Commercial Mortgage vary widely from bank to bank as these loans are based on different indexes. The most commonly used base rate is the Prime Rate published by the Wall Street Journal. This number is the average rate at which the 30 largest US banks will lend to their most favored customer. This rate as of June 30, 2006 is 8.00%. Depending on the merits of the loan (Loan-to Value, income from property, borrower’s financial condition), the banks will place a margin of as low as 0.25% and upwards of 3.0%. A less commonly used index is the Treasury Index. Currently as of June 30, 2006 Treasury index rate is lower than Prime Rate and thus seems more attractive.

Available Products

1. Fixed rate mortgage with 10 to 25 year terms.
2. Adjustable rate mortgage with 6 months to 7 year fixed rate + terms based on 20 to 30 year payout schedule.
3. Equity Lines available on free and clear properties

Simple type of property

1. Mixed use building
2. Single tenant  (store front, restaurant, etc.)
3. Strip malls
4. Properties with dry cleaners on premises
5. Warehouse
6. Apartment building

Much like a home equity line of credit (HELOC), money can be borrowed against the equity in a commercial property, but with higher closing fees. Usually, the building MUST be free and clear of all other debts and the bank will hold a first lien position. Qualifying Equity line is not simple. However, the benefit is having the convenience of a revolving line of credit.