Commercial property financing requires a different approach.
Commercial mortgage applications often involve property income, borrower financial strength, debt servicing, and the nature of the underlying asset.
Owner-occupied
Buildings your business operates from, where the business's financial strength supports the loan.
Income-producing
Multifamily, retail, office and industrial properties, assessed mainly on the income they generate.
Refinance and construction
Refinancing existing commercial properties, and eligible construction projects with staged draws.
Building X-ray
A commercial lender looks at every floor.
Residential lending is mostly about you. Commercial lending is about the building, the tenants and you. Tap a floor to see what gets examined.
Tap a floor of the building.
Every lender and property type is different. Knowing what each will ask for is my job.
Eligible property types
Lender appetite varies by property type, location and size. Financing may be available for eligible:
- Owner-occupied commercial properties
- Multifamily properties of five or more units
- Retail and office properties
- Industrial properties
- Commercial property refinancing
- Construction financing
The numbers lenders use
Loan-to-value (LTV) compares the loan to the appraised value. Debt service coverage ratio (DSCR) compares the property's net operating income to its annual mortgage payments. Lenders size the loan to whichever measure is more restrictive.
They also review the borrower's financial statements and net worth, the property's leases and tenants, the appraisal, and an environmental or building condition report where required.
Commercial terms are negotiated
Commercial mortgages are less standardized than residential ones. Amortization, term, prepayment terms, personal guarantees, reporting covenants and fees all vary and can affect the loan as much as the rate. For eligible multifamily properties, CMHC-insured programs may offer longer amortizations.
Qualification depends on lender underwriting. Rates, terms, fees and penalties vary by lender and are subject to change. Examples are illustrative only and are not a commitment to lend. Content reviewed October 20, 2026. Lending rules change; confirm current requirements before relying on them.
Put the numbers in perspective.
Nominal rate, compounded semi-annually (the Canadian convention for fixed rates).
Estimated monthly payment
$3,320.84
- Effective annual rate
- 4.551%
- Rate per payment period
- 0.3715%
- Number of payments
- 300
- Total interest, if the rate never changed
- $396,251
Illustrative only. Assumes one rate for the whole amortization, while real mortgages renew every few years at the rate available then. Lenders round and schedule payments in their own way. Not a rate offer or an approval.
Include any secured line of credit or second mortgage on the same property.
Loan-to-value
65.00%
- Estimated equity
- $315,000
Lenders use LTV to size the loan and price the risk. Maximum LTVs differ by purpose, property and lender: for example, refinances with federally regulated lenders are generally limited to 80%.
Uses your own value estimate. Lenders rely on their own appraisal, which may be different.
Rental and other property income, less vacancy and operating expenses, before mortgage payments.
Total mortgage payments over 12 months.
Debt service coverage ratio
1.25x
The property's income covers its mortgage payments 1.25 times. Each lender sets its own minimum and calculates income and expenses its own way.
Illustrative only. Lenders underwrite NOI using their own vacancy, expense and reserve assumptions.
Common questions
What is a good DSCR for a commercial mortgage?
A DSCR above 1.00x means the property's income covers its mortgage payments. Each lender sets its own minimum, which depends on the property type and loan program, and lenders calculate net operating income using their own assumptions.
How long does commercial mortgage financing take?
Usually longer than a residential mortgage, because appraisals, environmental reports and legal review take time. Allowing several weeks or more is sensible, especially for larger or more complex properties.
Are commercial mortgage fees different from residential?
Often, yes. Commercial financing commonly involves lender fees, appraisal and report costs, legal fees and sometimes a broker fee. All fees are disclosed in writing before you commit.
Related mortgage services
Let's discuss your mortgage.
Whether you're purchasing, refinancing, or reviewing an existing mortgage, start with a conversation about your circumstances and available options.