Commercial mortgages are underwritten very differently from home loans. If you are financing an investment or owner-occupied commercial property in Ontario, here is what lenders focus on.
The property’s income
For investment properties, lenders care most about net operating income and the debt service coverage ratio — whether the property’s cash flow comfortably covers the mortgage payments. A stronger, more stable income stream supports better terms.
Down payment and loan-to-value
Commercial mortgages generally require more equity than residential, with loan-to-value depending on property type, tenancy and risk. Multi-family tends to allow higher leverage than special-use properties.
The borrower and guarantors
Lenders review your experience, net worth, liquidity and credit, and often require personal guarantees. A track record with similar assets strengthens your application.
The property type and lease profile
Multi-family, industrial, retail and office each carry different risk in a lender’s eyes, as do lease terms, tenant quality and vacancy. Matching your deal to the right lender is half the battle — which is where a broker with access to banks, credit unions, insurers and private lenders adds value.
How Gurpinder Gaheer can help: Commercial Mortgage Financing in Ontario · Book a free 30-minute consultation
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