A commercial mortgage is a loan issued for the purpose of commercial land or buildings, not residential ones. Banks and other loan institutions still do the lending, but the borrower is usually a business, not an individual. Commercial mortgages can be used to develop or purchase land or buildings.

The Commercial Mortgage Market In Canada

Foreign players entering the Canadian market, along with securitization, is leading to a greater access to commercial mortgages, along with more flexibility in the types of properties that can be mortgaged. Securitization is directly related as an alternative to the traditional balance sheet lending of the big banks and insurance companies. These providers are also taking on higher risk loans more than ever before.

In the past decade, banks and insurance companies have shied away from all but the most desirable of properties and borrowers. The banks are slowly starting to become more aggressive and the new entrants to the lending industry are picking up the slack. This bodes well for potential borrowers.

Who Needs A Commercial Mortgage?

Commercial mortgages are available to people who are searching for financing ventures to cover costs of commercial purchases such as:

• New Commercial Construction
• Apartment Buildings
• Low-rise, mid-rise or high-rise commercial, industrial or institutional edifices
• Condominium complexes
• Retail malls
• Storage buildings
• Income properties
• Multi-residential properties
• Refinance and Cash-Out to meet any urgent business expenses
• Bridge financing
• Raw land financing
• Debt consolidation/refinance and cash out to meet  business expenses

Commercial Mortgages are designed for businesses and investors who wish to purchase or refinance commercial, income producing properties and offer a flexible way to raise capital.

Commercial Mortgage Loans For Canadians

Frequently, commercial mortgages have higher interest rates versus a residential mortgage. This is a direct result  that commercial mortgages carry a much higher risk. Also, if the deposit on the purchased property is less than 25%, the risk increases from a Lenders perspective.

The lender then decides upon the commercial mortgage term. This can be anywhere between 10 years to 20 years and can have either a fixed rate of interest or a variable rate of interest.

Contact Us

Every commercial lender requires a different set of criteria based on the applicant’s unique situation. Whether you are a first time commercial buyer or a seasoned commercial owner, arranging a mortgage can be very daunting and involved. Our MortgageTree specialists are here to navigate you through every step of the process, ensuring you know exactly what your options are and helping you determine the best mortgage product for your needs. Contact us today for a free consultation.