A loan granted for a commercial purpose, normally secured against commercial
property, although residential property may be used as security but the loan is
for the benefit of commercial purposes. Usually carries a higher rate of
interest than a residential mortgage because the lender perceives a higher
degree of risk In addition the loan to value can be greatly reduced due to that
perceived greater risk.
There are varying degrees of commercial mortgage, Buy to Lets used to be classed
as commercial but now they are deemed to be more residential, but the main type
of commercial mortgage is lent on buildings such as factories, pubs, clubs and
nursing homes to name a few.