A commercial mortgage is similar to an ordinary house mortgage, but for a commercial building such as a shop, warehouse, factory or office. It is a long-term loan, primarily secured against the property being purchased or re-financed, however it is common for there to be secondary security, such as a debenture over a company or a personal guarantee.
The maximum percentage of the value of the property that is advanced is normally less than for a residential mortgage, with 75% typically being the maximum and 60% being quite common.
While may commercial mortgages are taken by businesses seeking to own their own premises, others are taken be property investment businesses. In this case, they can include residential property that is let out as a business, and for such businesses, the maximum percentage advanced can sometimes be higher, often 80-85%.