commercial mortgage

A young couple in Lekki takes out a loan to buy their first flat. They fill a form, show payslips, and the bank checks if their salary can carry the monthly repayment. That is a residential mortgage, built around one family's income.

Now consider a man who wants to buy the four shop building beside his church, the one with tenants already paying rent every month. The bank does not ask about his salary alone. It asks what the shops earn, what the rent roll looks like, and whether the building itself can pay for itself over time. That is a commercial mortgage, and it plays by a different set of rules entirely.

Commercial mortgages fund property meant to make money rather than shelter a family, things like office complexes, hotels, warehouses, filling stations or a row of shops in a busy market. Lenders look less at your personal salary and more at the property's income potential, its location, and how strong the business plan behind it is. The loan terms are usually shorter, the interest rate often higher, and the deposit required bigger, sometimes 30 percent or more of the property value.

In Nigeria, a trader looking to buy a warehouse in Apapa for stocking imported goods might approach a bank for this kind of facility, and the bank will study the warehouse's rental history or the trader's business turnover before approving anything. In the United Kingdom, someone buying a small block of flats to let out, or a unit on an industrial estate, will meet the same kind of scrutiny from their lender, sometimes called a buy to let commercial loan depending on the setup.

For Nigerians abroad sending money home to help a sibling buy a shop space in Onitsha, it helps to know this is not the same paperwork as a mortgage for a house. The lender wants to see the business case, more than family love and good intentions.