What Is An Amortising Commercial Mortgage?
When you ‘Amortize’ a debt, it means that you will make regular capital repayments to reduce or pay off the loan. So this means that with an Amortising Commercial Mortgage you will make payments towards the outstanding loan as well as the interest.
Typically with commercial mortgages you will make the capital repayments over a fixed term of 10-30 years. Some banks may give you the option of a ‘Part Amortising’ repayment profile. This means you just pay of some of the capital over the terms of the loan (e.g. 50% instead of 100%).
Its possible that with a commercial mortgage you only service the interest, this would be an interest only commercial mortgage. This would be classed as a non-amortising commercial mortgage.« Back to Glossary Index