An owner-occupied commercial mortgage refers to a type of commercial mortgage loan that is obtained for the purpose of purchasing or refinancing a commercial property that the borrower intends to occupy and use for their own business operations. In other words, the borrower not only owns the property but also operates their own business within it. This is in contrast to non-owner-occupied commercial mortgages, where the property is purchased as an investment and is typically leased or rented to tenants.

Owner-occupied commercial mortgages are used to finance various types of properties such as office buildings, retail stores, industrial facilities, and other spaces where the borrower’s business activities take place. These mortgages are typically secured by the property itself, and the borrower is required to make regular payments that include both principal and interest over a predetermined period.

Most lenders will assess the borrower’s business financials, creditworthiness, and the viability of the business itself when considering an owner-occupied commercial mortgage application. This is because the lender wants to ensure that the business is generating enough income to cover the mortgage payments and other related expenses.

Interest rates, terms, and requirements for owner-occupied commercial mortgages can vary based on factors such as the borrower’s credit history, the property’s value, the business’s financial stability, and prevailing market conditions. It’s important for borrowers to carefully evaluate their business’s financial situation and their ability to meet the mortgage obligations before entering into an owner-occupied commercial mortgage agreement.