15 May 2021

Commercial Loans: 3 Things to Know About This Loan Type

Pros and Cons of Being an Owner/Builder

Commercial loans can be used by companies to purchase inventory, pay off business expenses, and purchase a property. Their terms are different from residential loans and business loans. A nice perk is that it can be stretched out to a 30-year loan through amortisation. To help the company offset some of the payments that go to interest, linking an offset account is another perk. 

Loan Terms

Commercial property is a big investment. It’s also a real estate type that moves slowly. The loans for this purpose are also large but come with different requirements than a residential home loan.

Residential home loans are offered in 15 to 40 year terms. Loans for commercial purposes typically runs 5 to 15 year loan terms. We understand that stretching the period out a further might be necessary taking the commercial loan term to 30 years.

Common Loans

The most common commercial loans include property purchase, refinance, and property development. Subdivision finance, debt finance, and business refinance. Each must be used for the purpose stated. Each loan also comes with its own set of requirements and regulations.

Offset Account

Once the loan is approved, an offset account sets off the amount paid toward interest. This makes the loan less expensive over time. The amount in the account directly offsets the principal and lessens the interest rate charge.

A minimum amount is required to maintain the offset account but your funds in the account are never locked in. To maximise the savings, deposit funds into account on a regular basis.

Commercial Loans Conclusion

To receive more information about available commercial loans, Mortgage House is ready to answer your questions. We offer offset accounts for these loans and can discuss possible loan terms for your goals and needs. Mortgage House also finances business car loans.

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