A commercial mortgage in Canada is a mortgage loan given to the owner of a property that is not considered a residential home. It is often times one of the largest financial investments that an investor makes in their life. The lender has security that the loan will be paid back because they have your property as collateral. In some cases, you may be required to assign multiple properties as collateral to account for any shortcomings to available equity or your ability to qualify for the full amount that you require.
At Clover Mortgage, we make it easy for our customers to apply and get approved for a commercial mortgage from as little as $100,000 to over $100,000,000.
An industrial building, office unit, apartment building, shopping mall, storefront plus apartments, retail plazas, and hotels are just some examples of the different types of commercial properties that you can get financing in the form of mortgages on. Similar to residential mortgages on a home, a commercial mortgage loan can come in the form or a first, second, or third mortgage, although first and second mortgages are much more common than third mortgages are.
While you can get a commercial mortgage form many types of the same lenders that provide residential mortgages, such as a bank, credit unions, trust companies, and private lenders who invest their personal money into mortgages, the interest rates are typically slightly higher on this form of financing than the rates on residential home mortgages. The lowest interest rates for commercial mortgages are on first mortgages that are insured by a third-party mortgage insurance policy from a company like the CMHC. CMHC specialized in mortgage insurance and do not provide other more traditional kinds of insurance such as life insurance or auto insurance.
Applying for a commercial mortgage requires more time, effort, and documentation than a residential mortgage. With the help an experienced professional mortgage broker from Clover Mortgage, your search for the right commercial mortgage can be easy. You will be presented with tailored mortgage solutions specifically made to cater to your needs and goals. We will find the best lender and find the right mortgage program for your commercial and business needs. Our commercial brokers work hard to provide you with the highest level of customer service and get you approved for a commercial mortgage loan easily and hassle-free.
A private commercial mortgage is one of the easiest types of commercial mortgages to qualify and in many cases, you will not be required to go through a credit check. If credit is a concern, then a private mortgage may be the best solution. Even if a credit check is required, a private lender will still likely lend to you if you have bad or even horrible credit. Your interest rate may be higher if your credit score is extremely poor and you have a history of missing payments.
Our commercial mortgage brokering team is able to arrange commercial mortgages and equity take out loans for almost any type of project including:
Our team of commercial experts specializes in getting fast approvals and finding innovative and unique solutions quickly, while providing exceptional customer service.
We will find the right lender for your deal to ensure that you receive some of the most competitive interest rates . Clover has access to a wide range of fixed rate, variable rate and interest only commercial mortgages from over 40 banks and lenders.
The process of getting a commercial mortgage or refinancing a property you already own can be a daunting task. Our promise to you is to help make this process as simple and hassle-free for you as possible.
Due to the risk factors to the lenders, additional work and information is required for a commercial deal that isn’t needed in the residential market. Although most commercial deals will require an appraisal, in some cases lenders will ask that an environmental study be conducted on the property and the land that it sits on. Other factors such as lease agreements, the quality of the tenants, the condition of the property, income statements, and more.
All of these documents are not merely reading content for the lender, but they help the lender understand and analyze the deal more accurately so that they can feel more confident about their decision.
Having a financial plan for your business and property will help you convince a lender that they should grant you your commercial mortgage. Remember that mortgage lenders seek out opportunities that are backed by the security of commercial properties and make them feel confident that they will continue to receive a steady fixed income from their investments. By providing them with proof that your property is generating a high fixed monthly return provides the lender with more peace of mind. This can also help you qualify for a lower interest rate which could result in real deep savings. Proof of income, financial stability, or high net worth can also help you get approved for a better rate. People who have well-paying careers or a high yielding portfolio are seen as posing a smaller risk to the lender.
At Clover Mortgage, our professional experienced commercial mortgage brokers specialize in the Canadian commercial mortgage industry. We will be able to help guide you along your the application process and ensure that you have everything needed to qualify for the mortgage loan so that you can continue to grow your business. Our goal is to help you feel a real sense of relief when you see how easy it can be to get approved for a commercial mortgage.
After reviewing your needs and current situation, our commercial mortgage team will search and find the best and most suitable lender to provide a competitive quote to finance your business mortgage. Once the quote is received and reviewed, your mortgage broker will negotiate with the lender on your behalf to get the best possible mortgage terms, conditions, and the lowest rate possible for you. Your mortgage term will vary on your qualification.
Applying for a commercial mortgage is easy. You call or text us at 416-674-6222, or contact us by email at firstname.lastname@example.org to get in contact with an experience commercial mortgage agent.
When refinancing a commercial estate, it is important to be able to determine how much equity you will have remaining in your real estate property, and how much will the total loan to value (LTV) be. Commercial mortgage lenders all have a loan to value threshold that they will lend up to. This is partly due to the fact that lenders want to ensure that the borrower has enough skin in the game to be motivated enough to make their monthly mortgage payments on time and not default on the loans. They also want to be sure that there is enough equity remaining in the real estate that in case they will need to go through with a power of sale, that they will be able to recoup 100% of their investments.
Use the following simple formula to calculate the loan to value of your building.
LTV = total mortgage balance divided by the property value multiplied by 100
Let’s take borrower who owns a multi-family building in a busy city centre with a growing local community that is worth $4,000,000 and they now have an outstanding mortgage balance of $1,000,000. They are coming up for renewal and are looking to refinance and take out an additional $1,000,000 in cash bringing the total mortgage balance to $2,000,000. They intend to use some of the money to renovate the current estate and part of the funds to purchase a new commercial building.
In this example the loan to value will be calculated as follows:
LTV = $2,000,000 (total mortgage balance) divided by $4,000,000 (property value) multiplied by 100 = 50%
This borrower is looking to refinance their current mortgage at an LTV of 50%. Generally speaking, in today’s market, this can be a very easy mortgage to get approved with great terms and a competitive rate. First mortgages will come with a lower interest rate than seconds, depending on a variety of factors Clover Mortgage can provide most borrowers with solutions that fit their needs and current financial situations.
Please try our Equity Calculator tool to help you calculate the equity you have available in your property. Please visit our main Tools page on our website to see what other mortgage calculators and tools could be of help to you.
Unlike residential mortgages which are usually given to an individual, a commercial mortgage is often sought out by a business or corporation. As a result, it can be more difficult to assess credit and income history for this type of loan than it would for a residential mortgage.
It is also likely that mortgage rates on commercial purchases and commercial refinancing will be higher than residential properties because they pose an increased risk to the lenders. The reason why commercial mortgages can be risky is that repayment is dependent on the success of the borrower’s business or solely based on rental income and lease income. As a result lenders tend to be more cautious when providing a mortgage for a commercial property.
The payment options for a commercial mortgages are very similar to those of residential ones. A variable interest rate with flexible terms allows the borrower to repay their mortgage as quickly or as slowly as they want. A fixed interest rate is the perfect option for a borrower looking to make consistent monthly payments throughout the course of their term because they prefer to feel protected against rising rates ahead.
All in all, searching for a commercial mortgage can seem complex and intimidating but it doesn’t have to be. With help from our trusted and knowledgeable commercial mortgage agents at Clover Mortgage, finding the right commercial mortgage solution for your business and personal needs can be an easy task.
Whether you are looking to buy a commercial or mixed-use property, or if you already own commercial properties and need to take out equity, the commercial mortgage team at Clover can help you get approved for a commercial mortgage or equity loan that is right for you. Our team will always fight to get you the lowest rates and best terms possible.
Here are some benefits to refinancing your existing commercial mortgage loan:
Here are a few potential drawbacks to refinancing your commercial mortgage:
Whether you need a quick and easy or a complex commercial mortgage solution, Clover Mortgage can help you get the best rates and terms available to you quickly and easily.
When purchasing a commercial building or property, you should always plan on providing a deposit. The standard deposit or down payment for a commercial mortgage purchase is between 20% to 25%, although Clover Mortgage works with lenders who offer commercial mortgages with a small percent as a down payment or deposit.
The acceptable deposit amount will differ between a first mortgage and a second commercial mortgage.
Here is a simple chart to help you better understand the minimum required deposit or down payment to qualify for a commercial mortgage on the purchase of a commercial property.
Minimum Deposit Required
Storefront with apartments (mixed use) mortgage
Multi-family residential mortgage
Commercial plaza mortgage
Farm land mortgage
Construction project and development mortgage
A CMHC insured mortgage can help keep the amount required for a deposit low while also reducing the rate that you pay in interest on your commercial mortgage. Rates of course depend partially on the term of your mortgage. Speak with your commercial mortgage broker about the benefits of having mortgage insurance.
Private commercial mortgage lenders also tend to approve borrowers with a lower down payment than a bank would require.
A commercial mortgage is a real estate loan that is secured by liens placed on a commercial property by the investor who is investing either institutional money, like a bank, or their own personal money, such as a private lender, into the mortgage loan.
For a new commercial purchase, you will be required to invest a deposit or down payment to qualify for the mortgage. The minimum required amount for a down payment for these types of mortgages are determined by the investor based on the amounts for these types mortgages that borrowers will for. This is determined based on the property value and several other factors.
Similarly to residential mortgages for a home, commercial mortgages are repayable in varying term lengths and at different fixed and variable interest rates. You can have a term of 1 year, a 2 year term, a 3 year term, a term of 5 year, or an even longer term. Also, commercial property loans can be amortized over a per-determined number of years.
These types of amortized mortgage loans are repaid in the form of fixed installment until you completely pay the full mortgage balance back to the lender in addition to the interest.
The commercial mortgage industry is a booming industry, especially in a major Canadian city centre like Toronto, Mississauga, Brampton, Ottawa (the capital city of Canada), and other populated cities in Ontario and across Canada. This is why Clover has mortgage brokers who have built their careers specializing in the commercial lending markets across Ontario. We work with over 40 different lenders including TD Bank, Scotia Bank, First National Bank, and other A, B, and private lenders. Each lender specialized in lending to specific types of borrowers with specific kinds of properties.
Use or service to apply for a commercial mortgage. You can call or text us at 416-674-6222, or contact us through email at email@example.com to get in contact with a licenced and experienced commercial mortgage broker.
Commercial mortgages do tend to have higher variable and fixed interest rates than other mortgages because they come with elevated risks to those who are lending the funds. It is always a good idea to plan on spending more on your commercial mortgage than you would on a residential mortgage of a home of similar value. The difference in interest on these mortgages can be as little as 0.5% higher or can be significantly higher depending on a variety of factors, including location, that the lenders will consider when reviewing your mortgage application. It’s good to keep in mind the interest rates on commercial mortgages vary across different Canadian markets, so speak with a mortgage broker who can help guide and advise you as part of the services they offer. The services that a reputable mortgage broker can provide you with can save you a lot of time and money in the long run.
For example, a commercial building in Canada located in a busy city centre like Mississauga, Ottawa, or Toronto will likely carry a lower interest rate than a property located in a small rural centre like Fort Erie, Ontario. This is because lending in a heavy populated city exposes the lender to less risk, which results in lower interest rates. Lower interest rates result in real savings for the borrower.
Since a commercial mortgage transaction is typically more complex, the legal fees tend to be higher too. You should speak with your lawyer to get a better understanding of how much money you should set aside to cover your legal expenses related to closing the deal.
To get the lowest rates and monthly payments on your commercial mortgage, your broker provides services that can help you explore adding mortgage insurance from a company like CMHC. Also, you should always compare the difference between fixed and variable rates.
Try our Mortgage Payment Calculator tool on our website to help you calculate what your monthly commercial mortgage payments will be. This is just one of the calculators that we made available to help you plan for your future.
A good commercial mortgage broker will provide you with all of the unbiased honest guidance and consulting services you need to ensure that you get matched with the mortgage that is best suited for you. The services we provide at Clover Mortgage will help you through the entire application process and we will find the right lender and negotiate the lowest rates and best terms on your behalf.
For the most part you will get to meet and communicate with the lender directly, although some private lenders value their privacy, so instead you may meet with and speak with a member of their representing team. Some lenders value their privacy so much that you may never know the person who will directly finance your loan.
Commercial mortgages account for a large portion of the mortgage that Clover brokers. With so many commercial mortgage solutions available, it can be hard and confusing to find the one you need. At Clover Mortgage, our team of experienced commercial mortgage agents and brokers are here to help.
*Commercial Mortgage Rates start as low as 7.75%
*Rates are subject to change. Terms & conditions may apply.
We pride ourselves on quick, easy & honest service. Our clients always come first.
We specialize in dealing with bad credit & bank declines. We turn a “no” into a “YES!”
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*Terms & conditions may apply.