Commercial Real Estate Financing 🏢
Commercial Mortgage Canada — Rates, Brokers & Expert Financing
LendGuide connects Canadian businesses, investors, and developers with licensed commercial mortgage brokers. From apartment buildings to construction loans — get expert financing matched to your project.
Get Commercial Mortgage Quotes
Free consultations from licensed commercial mortgage brokers across Canada.
Commercial Mortgage vs Residential Mortgage — Key Differences
Commercial mortgages are fundamentally different from residential mortgages — different qualification rules, different rate structures, and different lenders.
| Feature | Residential | Commercial |
|---|---|---|
| Loan size | Up to ~$3M | $500K to $50M+ |
| Down payment | 5–20% | 20–35% typical |
| Amortization | Up to 30 years | 15–25 years (up to 50 with CMHC) |
| Rate structure | Fixed or variable | Prime + spread or fixed |
| Qualification basis | Personal income | Property income (NOI) |
| Stress test | Federal OSFI rules | Lender-specific |
| CMHC insurance | Available under $1.5M | Available for rental apartments |
Income-Based Qualification
Commercial mortgages are qualified based on the property's Net Operating Income (NOI) — not your personal income. The property must generate enough cash flow to service the debt.
DSCR: The Key Metric
Debt Service Coverage Ratio (NOI ÷ annual mortgage payments) typically must be 1.20x minimum. A property generating $350,000 NOI can support $280,000 in annual mortgage payments (1.25x DSCR).
LTV Ranges
Conventional commercial LTV is 65–75%. CMHC insured apartment financing reaches up to 95% LTV — dramatically reducing the equity needed to acquire or develop a property.
Current Commercial Mortgage Rates in Canada
Commercial mortgage rates are priced differently than residential — based on the lender's Prime rate plus a spread that reflects property risk, LTV, and borrower strength.
Conventional Commercial
Prime + 1.0–3.0%
Based on property type, LTV, and borrower profile. Current bank prime: 5.45%.
CMHC MLI Select
Below-Market Fixed
The best commercial financing available for purpose-built rental apartments. 10-year fixed terms.
Bridge / Construction
Prime + 2.0–5.0%
Short-term financing while permanent financing is arranged. Interest only on drawn funds.
| Rate Factor | Impact on Rate |
|---|---|
| Loan-to-Value | Higher LTV = higher rate to compensate lender risk |
| Property type | Apartments lowest risk, land / raw land highest |
| DSCR | Strong coverage ratio results in tighter spreads |
| Borrower experience | Experienced investors access better pricing |
| CMHC insurance | Significantly lower rates vs. conventional |
| Term length | 5–10 year terms typically offer the best pricing |
Commercial Property Types — What We Finance
Every property type has different financing terms and lender preferences — our brokers specialise across all asset classes.
Apartment Buildings (5+ Units)
Purpose-built rental apartments are Canada's most financeable commercial asset class. CMHC MLI Select offers up to 95% LTV and 50-year amortization for qualifying projects — the best commercial financing terms available in Canada.
Learn more →
Mixed-Use Properties
Retail or office on lower floors, residential above. Financing depends on the income split — properties with 50%+ residential component often qualify for better rates.
Learn more →
Retail & Strip Malls
Conventional financing at 65–70% LTV. Anchor tenant quality, lease terms, and location drive lender appetite. Single-tenant retail vs multi-tenant changes the risk profile significantly.
Learn more →
Industrial & Warehouse
One of Canada's strongest commercial asset classes. Strong demand from e-commerce logistics has driven cap rate compression. Typically financed at 65–75% LTV with 20–25 year amortization.
Learn more →
Construction & Development
Short-term financing for ground-up construction or major renovation. Funds drawn in stages as construction progresses. Converted to permanent financing on completion.
Learn more →
CMHC MLI Select — Apartment Financing
Canada's best commercial financing program. Up to 95% LTV, 50-year amortization, below-market rates. Available for purpose-built rental apartments meeting affordability and energy efficiency criteria.
Learn more →
CMHC MLI Select — Canada's Best Apartment Building Financing
Featured Program
CMHC's MLI Select program offers the most competitive commercial financing available in Canada for purpose-built rental apartments:
- Up to 95% Loan-to-Value
- Up to 50-year amortization
- Below-market fixed interest rates
- Available across all of Canada
- Rewards affordability and energy efficiency with better terms
Eligible properties:Purpose-built rental apartments (5+ units) meeting CMHC's scoring criteria across affordability, accessibility, and climate compatibility.
Learn more about CMHC MLI Select →How Lenders Qualify Commercial Mortgages in Canada
Unlike residential mortgages that qualify based on your personal income, commercial mortgages qualify based on the property's income.
Net Operating Income (NOI)
$500,000 gross rent − $150,000 expenses = $350,000 NOI
The property's earning power after operating expenses but before mortgage payments. This is the foundation of commercial mortgage qualification.
Debt Service Coverage Ratio (DSCR)
$350,000 NOI ÷ $280,000 payments = 1.25x ✓
Lenders typically require 1.20x–1.30x minimum. A DSCR above 1.0x means the property generates more income than needed to service the debt.
Loan-to-Value (LTV)
$6.5M mortgage on $10M property = 65% LTV
Conventional commercial: 65–75%. CMHC insured apartment financing can reach 95% LTV — dramatically reducing the equity required.
Cap Rate
$350,000 NOI ÷ $7M value = 5.0% cap rate
Used to compare investments and assess market pricing. Lower cap rates indicate higher valuations. Cap rates vary widely by city and property type.
Commercial Mortgage Financing by Province
Market conditions, cap rates, and lender availability vary by province.
Commercial Mortgage Brokers by City
Find licensed commercial mortgage brokers in major Canadian cities.
Commercial Mortgage Questions — Answered
Common questions from Canadian business owners, investors, and developers.
Ready to Finance Your Commercial Property?
Get matched with a licensed commercial mortgage broker. Free consultation, no obligation. We connect you with specialists in your asset class and market.