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COMMERCIAL MORTGAGES DEMYSTIFIED: FIXED-RATE VS. ADJUSTABLE-RATE

Fixed-rate and adjustable-rate mortgages are two common types of loans used to finance commercial real estate properties. These two mortgages have different interest rate structures and the level of risk they entail. Letu2019s continue reading to learn more about them.

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COMMERCIAL MORTGAGES DEMYSTIFIED: FIXED-RATE VS. ADJUSTABLE-RATE

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  1. COMMERCIAL MORTGAGES DEMYSTIFIED: FIXED- RATE VS. ADJUSTABLE- RATE

  2. Fixed-rate and adjustable-rate mortgages are two common types of loans used to finance commercial real estate properties. These two mortgages have different interest rate structures and the level of risk they entail. Let’s continue reading to learn more about them. WHAT IS A FIXED-RATE COMMERCIAL MORTGAGE? In a fixed-rate commercial mortgage, the interest rate remains constant throughout the loan term. Fixed-rate commercial mortgages are known for their reliability and are commonly used for several commercial properties, including office buildings, retail spaces, industrial facilities, and more. BENEFITS OF FIXED-RATE COMMERCIAL MORTGAGE Interest Rate Stability: In a fixed-rate commercial mortgage, the interest rate remains constant throughout the loan term. Predictable Monthly Payments: With a fixed-rate mortgage, borrowers make consistent monthly payments that include both principal and interest. Long-Term Planning: Fixed-rate mortgages are often chosen for long-term financing, as they provide certainty about the cost of borrowing over an extended period, typically ranging from 5 to 30 years. Rate Lock: Borrowers can lock in a specific interest rate at the time of loan origination, which protects them from fluctuations in market interest rates. Higher Initial Rates: Fixed-rate mortgages typically have higher initial interest rates than adjustable-rate mortgages. Interest Rate Risk Mitigation: Fixed-rate mortgages are less susceptible to fluctuations, making them a suitable choice when interest rates are expected to rise.

  3. Fidelity Mortgage Lenders Can Help You with the Right Commercial Mortgage The decision between a fixed-rate and adjustable-rate commercial mortgage should be based on a thorough evaluation of your financial situation and investment objectives. Consulting with a financial advisor or commercial real estate expert can provide valuable insights and help you make an informed decision. Fidelity Mortgage Lenders can help you choose the right commercial mortgage according to your needs. Our experts are always available to help you with your commercial mortgage needs. Contact us today to get started.

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