What a commercial mortgage is
A commercial mortgage finances the purchase, construction, or refinancing of commercial property — from an owner-occupied premises to an income-producing building. It’s a distinct product from the working-capital and asset-based options, sized and structured around real estate.
Commercial construction mortgages
For a ground-up build or a development project, a commercial construction mortgage advances funds in stages as construction milestones are met, rather than all at once. Once the project is complete and stabilised, construction financing is frequently converted to a standard commercial mortgage. This staged approach keeps financing aligned with the progress and risk of the build.
When it’s a good fit
- You’re buying, building, or refinancing commercial real estate.
- You have a viable project or property income to support the financing.
- You can contribute equity or a down payment toward the project.
What it costs
Commercial mortgages are priced as an interest rate over a term and typically require meaningful equity (a down payment) in the property. Construction financing advances in stages and is priced for the higher risk of a build, until the project stabilises and often converts to a standard commercial mortgage.
Pros and cons
- Pros: finances purchase, construction, or refinancing; long amortisation; builds equity in real estate.
- Cons: requires equity and full underwriting; construction financing involves staged draws and more conditions.
How to apply — what you’ll need
Details of the property or project, its income or your business plan, your equity contribution, and financials. For construction, a project budget and timeline.
Educational information only — not an eligibility decision. All funding and property decisions are made by the lending partner.
Common questions
What is a commercial construction mortgage?
A commercial construction mortgage funds the ground-up build or major development of commercial property. Rather than a single lump sum, funds are typically advanced in stages as construction milestones are reached, then often converted to a standard commercial mortgage once the project is complete.
What can a commercial mortgage be used for?
Buying commercial real estate, constructing or developing a property, or refinancing an existing commercial mortgage — for owner-occupied premises or income-producing property.
How much do I need as a down payment?
Commercial mortgages generally require meaningful equity in the project, with the exact amount depending on the property, its income, and the lender. The lending partner sets the terms.