Commercial real estate mortgage - Financial definition

A commercial real estate mortgage is a financial instrument used to finance the acquisition or refinancing of income-generating properties such as office buildings, retail centers, or industrial facilities. These loans are secured by the underlying property and structured with terms tailored to the specific needs of the borrower and the property type.

Lenders assess the property's income potential, the borrower's creditworthiness, and prevailing market conditions to determine loan amounts, interest rates, and repayment terms. Commercial real estate mortgages play a pivotal role in facilitating the development and expansion of commercial properties, driving investment in the real estate market, and supporting economic growth.