Commercial Mortgage Rates

What You Need To Know About Commercial Mortgage Rates

Just a few words about commercial mortgage rates. There are two kinds of rates: fixed and variable. A fixed rate is the same throughout the life of the loan. A variable rate will change over time, and is based on the Prime Rate plus whatever margin your lender offers, based on your eligibility.

If interest rates are low, securing a low fixed rate will mean you pay less interest over the entire mortgage. A variable rate, which is considered by some to be more risky, can give you a lower payment for a period (before it increases), which will let you use the money saved for other investments.

We think the smart choice is to get a below-market fixed interest rate for as long as you can. This is where our SmartChoice Commercial Loan (also known as the 504 Loan) comes in.

Because you have two separate loans with the 504, you end up getting a blended rate that is below market. The first loan is either fixed or variable, and is at or slightly higher than conventional financing rates. The second mortgage (the 40% loan) is considerably lower than market interest rates, and is fixed for the life of the loan. Having a lower interest rate lets your company retain more capital.

Our clients appreciate low commercial mortgage rates too as around 95% of our business comes via referrals which is unusual for our industry.