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My Mom has some money lent out to a business as a mortgage. It's up for renewal, and it's the first renewal since my step-father passed away. He used to deal with it. It's easy to give her an idea of what a residential rate would be, but does anyone have any idea of what the commercial rate would be?

I know there are ten thousand factors, but on a good risk, is it 1% above residental, 2%? etc.
 

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I was told prime plus 2-3 when I was shopping for a commercial mortgage a month or so back. Undoubtedly lots of variables - the quote was "quick and dirty" - no appraisal, no credit app, etc.
 

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My business loan was prime + .25%. But it is those factors that can affect the rate.

If you really have no idea, and not knowing the business details that you are involved in yourself. I would recommend either contacting another company under the same pretenses for a quote....then you will at least know what the going rate is. Or...you may want to contact a lawyer that deals in commercial RE/financing as they should probably review your finance/lease agreement.
 

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Why not take the rate you are currently charging them and go back and see what the prime rate was when it started/when they last renewed... if it was 2 over prime then, just use 2 over prime now?
 
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