Commercial Mortgage

Commercial property financing

From multi-unit residential to retail and office space, we connect you with specialized commercial lenders and help structure the deal.

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How does a commercial mortgage work in Canada?

A commercial mortgage finances income-producing property such as apartment buildings with five or more units, retail, office, industrial or mixed-use buildings. Unlike a home mortgage, it's underwritten mostly on what the property earns, with your experience and net worth as supporting factors. Down payments are larger, terms are often shorter, and third-party reports are part of the process.

Lenders focus on the property's net operating income and the debt service coverage ratio (DSCR), commonly 1.2 to 1.3 times.
Conventional loans are commonly limited to about 65% to 75% of value.
CMHC-insured financing for 5+ unit residential buildings can reach 85% loan-to-value under the standard program.
Expect third-party reports, such as a commercial appraisal and environmental assessment.

Units for multi-unit commercial

75%

Common max LTV (conventional)

1–25yr

Amortization

1.2x+

Typical DSCR

Property types we finance

Multi-unit residential

Up to 85% LTV insured

5+ unit apartment buildings, student housing, and senior living.

Retail & mixed-use

Up to 75% LTV

Storefronts, strip malls, and mixed commercial/residential properties.

Office buildings

Flexible terms

Single and multi-tenant office spaces, co-working facilities.

Industrial & warehouse

Up to 75% LTV

Warehouses, manufacturing facilities, and logistics centres.

Land & development

Case-by-case

Raw land purchases and development financing for new projects.

Special purpose

Specialized lenders

Hotels, gas stations, medical offices, and childcare centres.

Example: how DSCR sets the loan size (illustrative)

A small mixed-use building brings in $180,000 a year in rent. After property tax, insurance, maintenance and vacancy, net operating income (NOI) is $120,000.

If the lender requires a DSCR of 1.25, the most the property can support in annual mortgage payments is $120,000 ÷ 1.25 = $96,000, or $8,000 a month. The loan amount is whatever $8,000 a month repays at the lender's qualifying rate and amortization, and then it's capped again by the lender's loan-to-value limit. Whichever test gives the smaller loan wins.

How the process works

1
Share the deal summary
Property type, price or value, current rent roll, operating expenses and how much you want to borrow.
2
Match to the right lender type
Banks, credit unions, CMHC-insured lenders for multi-unit residential, or private capital, depending on the property and timeline.
3
Receive a term sheet or letter of intent
The lender sets out the loan amount, rate type, amortization, fees and conditions.
4
Complete third-party reports
Typically a commercial appraisal and environmental assessment, and often a building condition report.
5
Final approval and closing
Conditions are cleared, lawyers prepare the security documents, and funds are advanced.

Why use a broker for commercial mortgages?

Access to specialized lenders

Many commercial lenders don't deal with the public through a branch. We connect you with CMHC-insured lenders, credit unions, pension funds, and private capital.

Competition for your deal

Presenting the same file to several lenders lets you compare rate, fees, amortization and conditions side by side instead of taking a single offer.

Creative structuring

Vendor take-backs, mezzanine financing, bridge loans: we know how to structure complex deals.

CMHC-insured options

For residential buildings with five or more units, CMHC-insured financing typically comes with lower rates than conventional commercial loans and allows up to 85% LTV.

Buying a duplex, triplex or fourplex instead? Those are financed as residential, so see our page on second home and rental property mortgages. Need to build from scratch? Read how construction financing with progress draws works. Business owners using residential equity toward a commercial purchase can look at borrowing against your home's value or refinancing your home mortgage.

Frequently asked questions

Common questions about financing commercial property.

How do lenders qualify a commercial mortgage?

Mainly on the property's income. Lenders compare net operating income to the annual mortgage payments, called the debt service coverage ratio (DSCR), and commonly look for about 1.2 to 1.3 times coverage. They also review the borrower's experience, net worth and credit, and the property's location and condition.

How much down payment do I need for a commercial property?

Conventional commercial loans are commonly limited to about 65% to 75% of value, so expect 25% to 35% down. CMHC-insured financing for residential buildings with five or more units can go higher, up to 85% loan-to-value under the standard program.

What documents are needed for a commercial mortgage?

Expect a current rent roll and leases, two to three years of property operating statements, the purchase agreement, a personal net worth statement, corporate financial statements if buying through a company, and third-party reports such as an appraisal and environmental assessment.

How long does a commercial mortgage take to close?

Longer than a residential mortgage. Plan for several weeks to a few months, depending on the property type and how quickly appraisals, environmental reports and insurance approvals come back. CMHC-insured multi-unit deals generally take the longest.

Is a 4-unit building a commercial mortgage?

No. Properties with one to four units are usually financed as residential mortgages. Buildings with five or more residential units, and properties with retail, office or industrial space, are financed as commercial.

Let's discuss your commercial project

Tell us about the property and what you need. Start with a free, no-obligation consultation.

Start your commercial application