A commercial mortgage finances income-producing or business-occupied property — an apartment building, storefront, warehouse, office, or mixed-use. Unlike a home loan, it's underwritten primarily on the property's cash flow and your experience, not just your personal income.
Terms are shorter than the amortization
Most commercial loans amortize over 20–30 years but come due in 5–10 with a balloon payment — the remaining balance you refinance or pay off at term. That balloon is why maturity timing matters so much: you'll be back in the market well before the loan is 'paid off.'
Rates can be fixed for the term or floating over an index. Amortization, term, and rate are three separate levers — a longer amortization lowers the payment even if the term is short.
How lenders size the loan
Three numbers drive almost every commercial loan: loan-to-value (LTV), debt service coverage (DSCR), and debt yield. The lender lends the lowest amount all three allow. Strengthen any one — more income, a lower loan, a longer amortization — and your options widen.
The process
Expect a term sheet, then third-party reports (appraisal, and often an environmental Phase I), legal review, and closing. NYC deals also carry a mortgage recording tax that's often the largest single closing cost. From application to closing typically runs 30–90 days depending on the program.