Why a Mortgage Broker Beats Your Bank for Commercial Loans

Here’s something that happens way too often: a real estate investor walks into their bank, asks for a loan on their multifamily property, and thinks they’re getting a good deal. Then they find out later they left millions on the table.

Let me share a real example that just happened. An investor rehabbed a 57-unit property and rented it to one large corporation who sublets to individual tenants. He went to his major bank where he does all his banking. They offered him $13 million. Sounds good, right?

Wrong. Once the bank discovered it was one corporate tenant, they said no. Deal dead.

He came to us. We got him $16 million instead. That’s $3 million more. Plus, his rate dropped by almost 1%. And we turned that ‘no’ into a ‘yes.’

This stuff happens all the time. And it’s costing investors like you real money.

Your Bank Doesn’t Offer What You Actually Need

Here’s the crazy part: banks often have the exact programs you need, but they don’t tell you about them.

We had another client who built a huge multifamily portfolio. Every single property, he went to his bank. Every single time, they gave him conventional loans at 75% loan-to-value with 25-year amortizations.

Know what his bank also offered? CMHC multifamily insurance. That means 85% loan-to-value and 40-year amortizations. Way more money in his pocket. Way better Cash Flow.

When he found out, he was furious. He told his bank he was moving everything to us for CMHC financing. Suddenly they said, “Oh, we do that too!”

Why didn’t they offer it from day one? Because conventional loans are easier for them. Less paperwork. Less work. But it costs you thousands every month in cash flow and leaves equity trapped in your properties.

Book Your Strategy Call

Most Lenders Won’t Even Talk to You

Here’s something most people don’t know: more than half of commercial lenders won’t work directly with you. Period.

They only work through mortgage brokers. So when you go direct to your bank, you’re only seeing a tiny slice of what’s actually available.

Different lenders want different things at different times. One might love construction loans right now. Another might be hungry for deals in a specific city. Some won’t touch loans under $2 million. Others specialize in exactly that.

If you’re talking to just one lender, you’re missing out on all of this.

Location and Loan Size Matter More Than You Think

Let’s say you want to borrow $1 million on a property in a smaller Ontario town. Some lenders will say no immediately. Not because your deal is bad, but because they don’t lend in that area or that amount is too small for them.

A good broker knows which lenders love your exact situation. We’re not trying to force a square peg into a round hole. We’re matching you with the lender who actually wants your business.

You Need Someone Who Thinks Like an Investor

When you work with a broker who invests themselves, they look at your whole portfolio differently.

They’re thinking: How does this loan set you up for the next one? Should we use CMHC here to keep your conventional lending power for another property? Would MLI Select be smarter for your long-term strategy?

A bank employee processing your loan? They’re just trying to get your one deal done. They’re not thinking about deal number three or five or ten.

Your mortgage strategy should build on itself. Each property should make the next one easier, not harder.

The Real Cost of Going It Alone

Let’s add up what that first investor we talked about almost lost:

$3 million less in financing (that’s equity you can’t access)
Nearly 1% higher interest rate (that’s thousands per month)
Got declined completely (deal dead, opportunity gone)

And he thought he was being smart by going where he banks!

This isn’t about making banks look bad. They serve a purpose. But for multifamily and commercial properties, you need specialists who do this every single day.

What to Do Right Now

If you own investment properties or you’re planning to buy multifamily real estate, just have one conversation with an expert broker. That’s it.

Talk through your portfolio. See what you might be missing. Find out if you’re leaving money on the table.

Maybe your bank is giving you the best deal possible. Great! But wouldn’t you rather know for sure than wonder if you’re losing thousands every month?

The conversation costs you nothing. But skipping it could cost you millions.

Book a portfolio review or preapproval call. We’ll look at what you have, what you want to do, and show you the best path forward. No pressure. No obligation. Just real advice from people who invest in real estate themselves.

Because at the end of the day, your bank works for the bank. A good broker works for you.

Book Your Strategy Call

Frequently Asked Questions

Why would my bank not offer me their best mortgage products?

Banks often push conventional loans because they're simpler and require less work. CMHC multifamily loans involve more paperwork and expertise. Even when banks offer these programs, their staff may not be trained or incentivized to present them to you first.

How much more can I actually borrow with CMHC versus conventional financing?

CMHC multifamily financing offers up to 85% loan-to-value versus 75% with conventional loans. On a $10 million property, that's $8.5 million versus $7.5 million – an extra $1 million in your pocket. Plus you get 40-year amortizations instead of 25, which dramatically improves cash flow.

Can I access all lenders by going direct?

No. More than half of commercial lenders only work through mortgage brokers. They don't deal directly with borrowers at all. By going direct to a bank, you're only seeing a small fraction of available options.

What's the benefit of working with a broker who invests in real estate?

Investor brokers understand portfolio strategy. They think about how each financing decision affects your next deal. They know which lending products preserve your borrowing power and which ones limit future growth. They're building a roadmap, not just closing one transaction.

Does it cost money to get a portfolio review from a mortgage broker?

No. Initial consultations and portfolio reviews are free. Brokers get paid by lenders when your deal closes, not by you. There's no cost to find out if you're getting the best financing available.

Why do different lenders care about property location?

Lenders have different geographic preferences based on their risk appetite and where they want to grow their business. One lender might love smaller Ontario towns while another only wants major cities. The loan amount matters too – some lenders won't go below $2 million while others specialize in smaller deals.

What happens if my bank declines my commercial mortgage?

A decline from one lender doesn't mean your deal is dead. Different lenders have different criteria and risk appetites. What's a 'no' at one bank might be an easy 'yes' at another. This is where having access to multiple lenders makes all the difference.

How much can a 1% interest rate difference actually cost me?

On a $10 million loan, a 1% rate difference costs you about $100,000 per year or roughly $8,300 per month. Over a 5-year term, that's half a million dollars. On larger portfolios, these differences add up to millions in unnecessary interest payments.

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

December 22, 2025