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Commercial Property Mortgages

Empowering Business Growth through Ownership

Commercial property mortgages are tailored for those looking to purchase office spaces, warehouses, retail shops, or other business-use properties. Whether you are a business owner seeking to secure a permanent location or an investor aiming to generate rental income, these loans offer a pathway to long-term growth and stability.

They provide an opportunity to build assets while eliminating the hassles of leasing commercial space.

Loan terms are typically influenced by factors such as the type of property, its projected income or business usage, and the financial standing of the borrower or business. While down payments and interest rates may be higher compared to residential loans, the potential for capital appreciation and income generation makes commercial mortgages a strategic investment option. Financing can be structured for owner-occupied or leased properties, offering flexibility to suit different business models.

Key Features

  • LTV options for Salaried & Self-employed customers
  • Tailored plans for SMEs and corporates
  • Financing for purchase or construction
  • Loan tenure up to 15 years
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FAQs

What types of properties can be financed with a commercial mortgage?
<p><span style="font-weight: 400;">Commercial mortgages can be used to finance a wide range of property types, including:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Office buildings</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Retail spaces (e.g., shopping malls, stores)</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Industrial properties (warehouses, factories)</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Multi-family units (apartment buildings)</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Mixed-use developments (properties with both residential and commercial components)</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Hotels, motels, and resorts</span></li> </ul>
What is the typical down payment for a commercial property mortgage?
<p>The down payment for a commercial property mortgage generally ranges between 20% and 30% of the property’s value. The exact amount can vary based on the lender, the type of property, and the borrower’s financial profile. For properties with higher risks, lenders may require a larger down payment.</p>
What are the requirements to qualify for a commercial property mortgage?
<p><span style="font-weight: 400;">To qualify for a commercial property mortgage, you typically need:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Good credit score: A higher credit score increases your chances of approval.</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Stable income or business cash flow: Lenders will assess the property’s income potential (for example, rental income) and your business&#8217;s financial health.</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Debt service coverage ratio (DSCR): This ratio compares the property&#8217;s income to the loan’s debt payments. A DSCR of 1.25 or higher is usually required.</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Property valuation: The property must be appraised by a licensed professional to ensure it meets the lender’s criteria.</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Down payment: As mentioned, 20%–30% is typical, but it can vary.</span></li> </ul>
Can I use rental income from the property to qualify for a commercial property mortgage?
<p><span style="font-weight: 400;">Yes, rental income is often a key factor in qualifying for a commercial property mortgage. Lenders will assess the potential rental income of the property to determine whether it can generate enough cash flow to cover the mortgage payments. They may also factor in a vacancy rate when calculating expected income to ensure the property remains profitable even during periods without tenants.</span></p>
How long does it take to get approval for a commercial property mortgage?
<p>The approval process for a commercial property mortgage can take anywhere from a few weeks to several months, depending on factors such as the complexity of the property, the lender’s requirements, and the applicant’s financial situation. The process often involves property appraisals, financial documentation, and detailed business analysis, which can lengthen the time frame compared to residential mortgages.</p>
Can I refinance my commercial property mortgage?
<p>Yes, it is possible to refinance a commercial property mortgage, often to secure a better interest rate, change the loan term, or access equity in the property. Refinancing terms will depend on factors like the property’s current value, the borrower’s creditworthiness, and market conditions. It&#8217;s common for commercial loans to have a balloon payment at the end of the term, making refinancing a popular option to pay off the remaining balance.</p>
What are the typical fees associated with a commercial property mortgage?
<p><span style="font-weight: 400;">In addition to the down payment and interest, there are several other fees associated with commercial property mortgages, including:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><b>Application fees</b><span style="font-weight: 400;">: Charged by the lender to process your mortgage application.</span></li> <li style="font-weight: 400;" aria-level="1"><b>Appraisal fees</b><span style="font-weight: 400;">: For the property’s professional valuation.</span></li> <li style="font-weight: 400;" aria-level="1"><b>Closing costs</b><span style="font-weight: 400;">: Legal fees, recording fees, and other administrative costs.</span></li> <li style="font-weight: 400;" aria-level="1"><b>Loan origination fees</b><span style="font-weight: 400;">: Charged by the lender for originating the loan.</span></li> <li style="font-weight: 400;" aria-level="1"><b>Inspection and environmental assessment fees</b><span style="font-weight: 400;">: If required, especially for large or complex commercial properties.</span><span style="font-weight: 400;"><br /> </span><span style="font-weight: 400;">These fees can add up, so it&#8217;s important to budget for them during the mortgage process.</span></li> </ul>

Related Services

01. Refinance Mortgages

Refinancing allows property owners to replace their current mortgage with a new one often to secure a lower interest rate, adjust the loan term, or switch to a more suitable mortgage product.

It’s a practical way to reduce monthly payments, save on interest over time, or improve overall loan terms to better match your financial goals.

02. Islamic Home Finance

Islamic home finance is offered by Islamic banks or the Islamic windows of conventional banks, providing an alternative to traditional mortgages. These financing options are structured in a way that avoids charging interest, aligning with Islamic principles that prohibit Riba (usury). The most common structures include Murabaha (cost-plus financing) and Ijara (leasing), both designed to ensure that the financial transactions comply with Sharia law while allowing individuals to purchase houses.

03. Credit Card Services

As an ancillary service, we also arrange for our clients tailored credit card solutions from leading banks to meet their individual and business needs. Our team streamlines the application process, ensures competitive offers, and provides expert guidance to help you choose the right card—whether it’s for rewards, travel, cashback, or corporate use.

With strong banking partnerships and a client-first approach, we make access to financial flexibility simple and efficient.

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Galaxy Prime is dedicated to help you navigate the mortgage process with confidence and ease. Our team of experts provides personalized and reliable solutions tailored to your financial needs.

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