You found a commercial property that makes sense on paper. The NOI works. The cap rate is solid. Now you need financing, and you are staring at a wall of options: Big 5 banks, credit unions, monoline lenders, life insurance companies, private lenders, CMHC-insured programs, and mortgage investment corporations. How do you know which one actually fits your deal?
Here is the truth most investors learn the hard way: the best commercial mortgage lender in Canada is not one specific institution. It is whichever lender fits your specific deal, your specific situation, and your specific timeline. The trick is knowing who does what, and having someone in your corner who can match you to the right one.
This guide breaks down every type of commercial mortgage financing lender in Canada so you can stop guessing and start strategizing.
The Six Types of Commercial Mortgage Lenders
1. Big 5 Banks (TD, RBC, BMO, Scotiabank, CIBC)
The Big 5 banks are the first place most people think of when they need a mortgage. For good reason: they offer the lowest rates on commercial deals. If you qualify.
The catch? They are strict. Very strict. They want strong credit, significant net worth, proven commercial experience, and a property that checks every single box. Understanding current commercial mortgage rates in Canada helps you evaluate whether a bank’s offer is competitive. Their underwriting process is thorough and slow, typically 6 to 12 weeks for a commercial deal.
What they offer:
- Rates in the 4.5% to 6.0% range (as of early 2026)
- Down payments of 25% to 35%
- Amortization up to 25 years
- DSCR requirement of 1.20x to 1.25x
Best for: Experienced investors with strong financials buying stabilized, cash-flowing properties in major markets.
Worst for: First-time commercial buyers, value-add projects, properties in smaller markets, or anyone who needs to close quickly.
The Big 5 are not one-size-fits-all either. Each bank has different appetites for different property types and deal sizes. TD might love a 20-unit apartment building in Toronto but pass on a strip mall in Moncton. RBC might be aggressive on industrial but conservative on retail. A broker who knows these preferences saves you weeks of dead-end applications.
2. Credit Unions
Credit unions are the underrated option in commercial lending. They operate regionally, which means they often know local markets better than any national bank. They see value in properties that the Big 5 might overlook.
Because credit unions are member-owned and not publicly traded, they have more flexibility in their lending criteria. They can look at a deal holistically instead of running it through rigid qualification software. If the property is in their region and the story makes sense, they can get creative.
What they offer:
- Rates in the 5.0% to 6.5% range
- Down payments of 20% to 35%
- Amortization up to 25-30 years
- More flexible underwriting on unique properties
Best for: Local deals in smaller markets, investors with good relationships in their community, properties that do not fit the Big 5’s strict criteria, and mixed-use buildings.
Worst for: Large-scale deals across multiple provinces, investors who need national coverage.
Credit union rates tend to fall between Big 5 banks and B lenders. They are competitive, and the flexibility often makes up for any small rate premium. Some credit unions have dedicated commercial lending teams that rival anything the big banks offer.
3. Monoline Lenders and Life Insurance Companies
This category includes lenders like First National, MCAP, Manulife, Sun Life, and Canada Life. These are commercial lending specialists. They do not operate branches or offer chequing accounts. All they do is lend.
Because commercial lending is their entire business, they have built underwriting teams that understand complex deals. They are particularly strong on larger multi-family and commercial properties. Life insurance companies specifically lend from their own balance sheet and tend to offer some of the most competitive rates on stabilized commercial assets.
What they offer:
- Rates in the 4.5% to 6.0% range (competitive with banks)
- Down payments of 25% to 35%
- Amortization up to 25-30 years
- Strong appetite for larger stabilized assets
Best for: Larger deals ($2M+), stabilized multi-family buildings, long-term holds where you want competitive rates and good terms.
Worst for: Smaller deals, value-add or transitional properties, borrowers who need speed.
Monoline and life company rates can rival the Big 5 banks, and their amortization options are often more flexible. They also tend to be more relationship-driven, which means repeat borrowers can negotiate increasingly favorable terms.
Match Your Deal to the Right Lender
4. Private and Alternative Lenders (B Lenders)
When the deal does not fit conventional lending criteria, private and alternative lenders step in. This includes B lenders who specialize in non-traditional commercial deals and private capital funds.
Private lenders prioritize the deal over the borrower. They care about equity, exit strategy, and whether the deal makes financial sense. Credit issues? Income verification challenges? Construction not yet complete? Private lenders can work with all of that.
The trade-off is cost. Private commercial mortgage rates typically run 7% to 12%, and they often charge lender fees of 1% to 3% of the loan amount. Terms are shorter too, usually 1 to 3 years.
What they offer:
- Rates in the 7.0% to 12.0% range
- Down payments of 15% to 35%
- Closing speed of 1 to 4 weeks
- Interest-only payment options
- Flexible underwriting on unconventional deals
Best for: Bridge financing, construction draws, value-add properties mid-renovation, borrowers with credit or income documentation challenges, deals that need to close fast.
Worst for: Long-term holds where you want the lowest carrying costs. Private lending is a tool, not a permanent solution.
The smart way to use private lending: get in the door fast, stabilize the property, then refinance into conventional or CMHC financing at much better terms.
5. Mortgage Investment Corporations (MICs)
MICs are a uniquely Canadian lending structure. They pool investor capital and deploy it as mortgages, typically at rates between conventional and private lending. Think of them as a middle ground.
MICs are regulated under the Income Tax Act and must distribute their income to shareholders. They tend to be more flexible than banks but more structured than individual private lenders.
What they offer:
- Rates in the 6.5% to 10.0% range
- Down payments of 20% to 35%
- Terms of 1 to 3 years (some offer longer)
- More structure and predictability than individual private lenders
Best for: Deals that are close to conventional but have one issue (credit, income documentation, property condition) that prevents bank approval. Also good for short-term financing needs where you want more professionalism than a typical private lender.
Worst for: Long-term financing. MIC rates are higher than banks, so they work best as a stepping stone to conventional refinancing.
6. CMHC-Insured Programs
CMHC is not a lender itself, but its insurance programs are game-changers for multi-family investors. When a lender originates a loan with CMHC insurance, the government backs the mortgage. That means the lender takes on almost zero risk, and they pass that benefit to you through lower rates and better terms.
The flagship program is CMHC MLI Select, and it is specifically designed for rental properties with 5+ units. Here is what it offers:
- Up to 95% loan-to-cost financing (as low as 5% down)
- Amortization periods up to 50 years
- Interest rates in the 3.5% to 5.0% range — often the lowest in the entire commercial lending market
- Minimum DSCR requirement of just 1.1x
The catch? CMHC-insured deals take time. The application process is detailed, and approval can take several months. You also need to meet specific energy efficiency or accessibility criteria under MLI Select to qualify for the best terms.
You can model what your building might qualify for using the CMHC MLI max loan calculator.
Best for: New construction or acquisition of stabilized multi-family buildings (5+ units), investors who can plan ahead and wait for the best terms.
Worst for: Non-residential commercial properties (office, retail, industrial), anyone who needs to close in under 90 days.
Comparison Table: Commercial Lender Types at a Glance
| Feature | Big 5 Banks | Credit Unions | Monoline / Life Co. | Private / B Lenders | MICs | CMHC-Insured |
|---|---|---|---|---|---|---|
| Rate Range | 4.5% - 6.0% | 5.0% - 6.5% | 4.5% - 6.0% | 7.0% - 12.0% | 6.5% - 10.0% | 3.5% - 5.0% |
| Down Payment | 25% - 35% | 20% - 35% | 25% - 35% | 15% - 35% | 20% - 35% | 5% - 15% |
| Speed to Close | 6 - 12 weeks | 4 - 8 weeks | 4 - 10 weeks | 1 - 4 weeks | 2 - 6 weeks | 3 - 6 months |
| Flexibility | Low | Medium-High | Medium | High | Medium-High | Low |
| Property Types | Stabilized all types | Regional, most types | Large multi-family, commercial | All types | Most types | Multi-family 5+ only |
| Max Amortization | 25 years | 25 - 30 years | 25 - 30 years | Interest-only | 1 - 3 year terms | Up to 50 years |
Note: Rates are approximate ranges as of early 2026 and vary based on deal specifics, property type, location, and borrower profile.
Get Your Commercial Rate Comparison
Why a Mortgage Broker Beats Going Direct
Here is where most investors make a costly mistake. They pick one lender and apply directly. Maybe it is their bank because that is who they have always dealt with. Or a credit union because a friend recommended them. Or a private lender because they saw an ad.
The problem with going direct? You only see one set of options. And you have no idea if those options are actually the best available for your deal.
A commercial mortgage broker changes the equation completely. Here is why.
Access to dozens of lenders through a single application. Instead of shopping yourself, your broker submits your deal to the lenders most likely to approve it with the best terms. One application, dozens of options. This is exactly how working with a broker saves investors on commercial deals.
They know which lender fits which deal. A good commercial broker has done hundreds of deals across every lender type. They know that Lender A loves 6-unit buildings in Ontario but will not touch retail. That Lender B has a special program for new construction in Alberta. That Lender C will go to 80% LTV on a stabilized asset when everyone else caps at 75%. This institutional knowledge is worth its weight in gold.
They negotiate on your behalf. When a broker brings volume to a lender, they have leverage. They can push for better rates, higher LTV, longer amortization, or waived fees. You do not have that leverage as an individual borrower.
They save you time. Commercial mortgage applications are document-heavy. A broker handles the packaging, the back-and-forth with underwriters, and the coordination between all parties. You focus on your deal.
They cost you nothing (usually). On most conventional and CMHC-insured commercial deals, the lender pays the broker’s fee. You get all the benefits of expert advice and broad market access at no additional cost. On private or alternative lending deals, there may be a broker fee of 1% to 2%, but this is disclosed upfront.
What to Look for in a Commercial Mortgage Lender
Whether you are going direct or working with a broker, here is what matters when evaluating a commercial lender.
Experience with Your Property Type
Commercial lending is specialized. A lender who does hundreds of multi-family deals per year will process your apartment building mortgage faster and with better terms than a lender who dabbles in commercial between residential files.
Ask specifically: how many deals have you closed on properties like mine in the last 12 months?
Realistic Timeline Commitments
Get a specific answer on timeline, not a vague “a few weeks.” Commercial deals have deadlines — conditional periods, firm dates, bridge loan expirations. If your lender cannot commit to a timeline, they are telling you something about their capacity.
Transparent Fee Structure
Every cost should be disclosed upfront: origination fees, lender fees, legal costs, appraisal costs, CMHC insurance premiums, commitment fees, and discharge fees. If you cannot get a straight answer on fees, walk away.
DSCR Flexibility
The DSCR requirement tells you a lot about how conservative or flexible a lender is. Most conventional lenders require 1.20x to 1.25x. CMHC programs require as low as 1.1x. Private lenders may be flexible if the equity position is strong. Understanding how commercial mortgages use debt service ratios helps you evaluate what any lender is offering.
Check your property’s numbers with the DSCR loan calculator for Canadian commercial properties before you start shopping.
Prepayment Flexibility
Some commercial mortgages lock you in with heavy prepayment penalties for the entire term. Others offer annual prepayment privileges or open terms at a slight rate premium. If you think you might sell, refinance, or pay down the mortgage early, this matters.
Red Flags to Watch For
Not all lenders operate the same way. Watch out for these warning signs.
Upfront fees before approval. Some private lenders or less reputable brokers charge commitment fees or application fees before they have done any real work. Legitimate lenders and brokers do not charge fees until you have a commitment letter. Application fees for CMHC or certain institutional lenders are normal, but they should be clearly explained.
Guaranteed approval promises. Nobody can guarantee approval on a commercial mortgage. If someone promises you a deal before reviewing your financials and the property, they are either lying or planning to bait-and-switch you into worse terms later.
No experience with your property type. A broker who does residential all day and dabbles in commercial on the side will not serve you well. Ask how many commercial deals they have closed in the last 12 months. Ask about deals similar to yours.
Pressure to close fast without due diligence. Good lenders want you to do your due diligence. If someone is rushing you to sign without proper review, that is a red flag.
Vague or shifting terms. If the rate, LTV, or fees change between your initial conversation and the commitment letter without a clear explanation, find another lender.
How to Choose the Right Lender for Your Deal
The right lender depends on three things: your property, your financial profile, and your timeline. Understanding commercial mortgage down payment requirements helps narrow the field before you start comparing lenders.
If you are buying a stabilized multi-family building and you have time: CMHC-insured financing through an approved lender will get you the best rates and terms in the market. The process is longer, but the savings are significant over the life of the loan.
If you are buying a clean commercial property and have strong financials: Start with the Big 5 banks and monoline lenders. You will get competitive rates and reasonable terms.
If your deal is a bit unusual or you need flexibility: Credit unions are your friend. Their ability to look at deals holistically and make exceptions to rigid criteria makes them valuable.
If you need speed or your deal is in transition: Private lenders and MICs get the deal done. Use them strategically, then refinance into conventional financing once the property is stabilized.
If you are not sure where your deal fits: This is exactly why working with a commercial mortgage broker matters. A broker who understands commercial lending can match your deal to the right lender from the start, saving you weeks of shopping and potentially thousands in unnecessary costs.
Find the Best Lender for Your Deal
Frequently Asked Questions
What is the minimum down payment for a commercial mortgage in Canada?
Do I need to pay a mortgage broker for commercial financing?
How long does it take to get approved for a commercial mortgage?
Can I get a commercial mortgage if I have never owned commercial property before?
What DSCR do commercial lenders require in Canada?
What is a Mortgage Investment Corporation (MIC)?
Disclaimer: LendCity Mortgages is a licensed mortgage brokerage, and our team includes experienced real estate investors. While we are qualified to provide mortgage-related guidance, the broader financial, tax, and legal information in this article is provided for educational purposes only and does not constitute financial planning, tax, or legal advice. For matters outside mortgage financing, we recommend consulting a Chartered Professional Accountant (CPA), licensed financial planner, or qualified legal advisor.
Written by
LendCity
Published
February 8, 2026
Reading Time
13 min read
Commercial Mortgage
Financing for commercial properties like retail, office, or multifamily buildings with 5+ units, with different qualification criteria than residential mortgages.
Commercial Lending
Financing for commercial real estate or business purposes, typically qualified based on property income (NOI) rather than personal income. Includes mortgages for multifamily buildings (5+ units), retail, office, and industrial properties.
Mortgage Broker
A licensed professional who shops multiple lenders to find the best mortgage rates and terms for borrowers. Unlike banks, brokers have access to dozens of lending options.
A Lender
A major bank or institutional lender offering the most competitive mortgage rates and terms but with the strictest qualification criteria, including full income verification and stress test compliance. Most investors use A lenders for their first four to six properties.
B Lender
Alternative lenders that serve borrowers who don't qualify with major banks, offering slightly higher rates with more flexible criteria.
Credit Union
A member-owned financial cooperative that provides banking services including mortgage lending. Credit unions often have more flexible lending policies for real estate investors than major banks, particularly for borrowers who have exceeded conventional lending limits.
CMHC Insurance
Mortgage default insurance from Canada Mortgage and Housing Corporation. For 1-4 unit investment properties, investors must put 20%+ down (no insurance available). However, CMHC offers MLI Select for 5+ unit multifamily properties, and house hackers can access insured mortgages with 5-10% down.
CMHC MLI Select
A CMHC program offering reduced mortgage insurance premiums and extended amortization (up to 50 years) for multifamily properties with 5+ units that meet energy efficiency or accessibility standards. Popular among investors scaling into larger apartment buildings.
DSCR
Debt Service Coverage Ratio - a metric that compares a property's net operating income to its mortgage payments. A DSCR of 1.25 means the property generates 25% more income than needed to cover the debt. Lenders typically require a minimum DSCR of 1.0 to 1.25 for investment property loans.
LTV
Loan-to-Value ratio - the mortgage amount expressed as a percentage of the property's appraised value or purchase price (whichever is lower). An 80% LTV means you're borrowing 80% and putting 20% down. Lower LTV generally means better rates and terms.
NOI
Net Operating Income - the total income a property generates minus all operating expenses, but before mortgage payments and income taxes. Calculated as gross rental income minus vacancies, property taxes, insurance, maintenance, and property management fees.
Private Mortgage
A mortgage from a private lender rather than a traditional bank, typically with higher rates but more flexible qualification requirements.
Amortization
The period over which a mortgage is scheduled to be fully paid off through regular payments of principal and interest. In Canada, common amortization periods are 25 or 30 years, though the mortgage term (when you renegotiate) is typically 1-5 years.
Hover over terms to see definitions, or visit our glossary for the full list.