Commercial property finance at home loan rates - 17 Jun 2010.

Its been a long time comming, but you can now use your residential property for commercial finance without being penalised on rates.

Generaly in the past, if you were to use a residential property for "business purposes", the bank would say well - even though it is residential, the purpose is commercial finance so we will do a "business" rate which has generally been a higher rate than your typical home loan rate.

This started to change about 4-5 months ago with ING doing their mortgage simplifier  rate for use in financing commercial property. So if 40% of the purchase price was from residential finance, and 60% was at commercial finance rates, it was much more competitive. The loan term of 30 yrs with 5 yrs interest only is also more attractive with this type of loan.

Then in the last month, another mainstream institution has allowed their best residential rate (6.47% as at 15/06/10) to be used to purchase a commercial property. This is currently about 0.9% below the standard variable rate of the main banks.

So if you are financing a commercial property, and have some residential equity, there has never been a better  time to consider your options.

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