Great Private Mortgage Rates On Commercial Property
“Private Mortgage Rates on Commercial Property Now As Low As 7% in The GTA”
The commercial financing world has been turned upside down. Long held as the gold of traditional lenders in their portfolios, the commercial mortgage market is slowly getting taken over by private lenders.
Well, perhaps taking over is a bit strong, but definitely gaining share in this property mortgage market is not an understatement.
Traditionally, private mortgage interest rates started at 10% for the better deals with an interest term of no more than one year and a hefty private lender fee. But that has been changing as more and more investors flee the stock market and take refuge in mortgage financing for the security it offers and the predictability of return.
In strong market regions like the Greater Toronto Area, privates have gone so far as to offer interest rates as low as 7% with interest terms of two to three years in a lot of cases.
This is largely driven by the higher quality of available deals as institutional lenders continue to take a cautious approach to issuing commercial property mortgages. And with the best available institutional rates in the 5.5% to 6.5% range, private mortgages are right there with respect to being competitive.
While most privates do not offer an amortized payment, the interest only payment is kind to the cash flow and allows business owners somewhere to park their financing during the current economic storm in the capital markets.
Private lenders tend to be very regional and there are many areas that don’t have a lot of private mortgages available, especially not at 7%. But for those who happen to be in the highly sought after market areas, the private loan rates are definitely something to consider.
This includes commercial property financing for both commercial and industrial properties. Lending requirements can still be similar to the banks in terms of what a private lender wants to see from the borrowers, but the decisions tend to be made much quicker which can make all the difference when you’re trying to close a transaction that’s on the clock.
While private mortgages are rarely a long term solution, right now they may be the best solution available to you for a commercial property purchase or refinancing situation. Definitely something to consider if you are looking for commercial property mortgage financing.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel