What is the difference between a commercial mortgage and a residential mortgage?

What is the difference between a commercial mortgage and a residential mortgage Introduction: The Diverse Landscape of Mortgages Hello everyone! Mortgages are the backbone of real estate financing, but did you know that there are significant differences between commercial and residential mortgages? Today, we'll explore these distinctions, shedding light on the unique aspects of each type. Whether you're a potential borrower or a curious observer, this knowledge will undoubtedly prove valuable. Let's dive in! Property Type: The Fundamental Divide One of the most apparent disparities between commercial and residential mortgages lies in the property type they finance. Residential mortgages are tailored for homes, apartments, and other dwellings primarily used for personal occupancy. On the other hand, commercial mortgages are designed for properties utilized for business purposes, such as office buildings, retail spaces, and industrial complexes. This distinction sets the stage for the contrasting features of these two mortgage types. Loan Terms: Flexibility vs Rigidity When it comes to loan terms, residential mortgages tend to offer more flexibility. Borrowers often have access to a range of options, such as fixed-rate or adjustable-rate mortgages, and can choose the term length that suits them best.