Multi-family investors in Ontario usually choose between CMHC-insured (MLI Select) and conventional financing. Here is how they compare and when each wins.
Leverage and equity
MLI Select can support much higher loan-to-value than conventional commercial financing on qualifying deals, meaning less equity down. Conventional lenders typically require more equity.
Rates and amortization
Because the loan is insured, MLI Select rates are competitive and amortizations can be significantly longer than conventional terms — both of which lower payments and improve cash flow. Conventional financing has shorter amortizations and no insurance premium.
Cost and effort
MLI Select involves a CMHC premium and a more involved application, including meeting points commitments. Conventional financing is simpler and faster to arrange but generally less generous on terms.
Which to choose
If your property and plan can qualify for strong MLI Select terms, the long-term cash-flow advantage usually outweighs the premium and effort. For smaller, faster or non-qualifying deals, conventional may fit better. A broker can run both scenarios.
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