Commercial Mortgage Financing in Toronto, Ontario

Your bank only offers their own products. We shop your Toronto deal across 50+ lenders — banks, credit unions, and alternative commercial financiers — to find the lowest rate, best leverage, and fastest close. Toronto commercial deals face Ontario plus municipal land transfer taxes, tight vacancy, and heavy pro-forma scrutiny. CMHC MLI Select is often the cleanest path for 5+ unit multi-family; conventional office and retail require strong tenant quality and 1.20x+ DSCR.

We finance purpose-built rental, mid-rise multi-family, retail plazas, and mixed-use along major corridors across North York, Etobicoke, Scarborough, downtown core, and transit corridors along Yonge, Eglinton, and Queen East. Deals are qualified on NOI and DSCR with CMHC MLI Select available for 5+ unit multi-family and conventional programs for office, retail, and industrial assets.

Expect 45 to 90 days from application to funding for Toronto commercial deals, depending on property complexity and third-party reports (appraisal, Phase 1 environmental). CMHC-insured multi-family files may take longer due to CMHC review.

Most conventional lenders look for 1.20x–1.25x DSCR on stabilized Toronto assets. CMHC MLI Select requires 1.10x minimum, often achievable with extended amortization on strong Greater Toronto Area rents.

Commercial mortgages are underwritten primarily on the property's income (NOI) and DSCR, whereas residential mortgages focus on personal income and credit. Rates are typically higher, and terms range from 1 to 25 years. Additionally, commercial properties require more extensive due diligence, such as environmental assessments and structural reports.

Debt Service Coverage Ratio (DSCR) is the property's Net Operating Income divided by its annual debt obligations. Lenders typically look for a DSCR of 1.2x or higher to ensure the property can cover its mortgage payments. It is the single most important metric in commercial lending.

Down payments vary by property type. While CMHC-insured multi-family can be as low as 5% down, most conventional commercial mortgages (office, retail, industrial) require 25% to 35% down.

Lenders require a Phase 1 Environmental Site Assessment (ESA) to ensure there is no contamination on the property. If the Phase 1 shows potential issues, a Phase 2 (soil testing) may be required. This is standard for almost all commercial real estate transactions in Canada.

Commercial rates are pegged to Government of Canada bond yields plus a lender spread based on property risk. CMHC-insured multi-family runs 4.25%–5.25%; conventional stabilized deals 5.0%–6.5%. See our live commercial mortgage rates hub for current ranges by property type and province.

Yes, most commercial mortgages have "Yield Maintenance" or "Defeasance" penalties if you pay them off early. Unlike residential mortgages where the penalty is often 3 months' interest, commercial penalties can be substantial. We help you choose terms that match your investment horizon.

Recourse debt means the lender can go after your personal assets if the property defaults. Non-recourse debt (often available for CMHC or high-quality stabilized assets) limits the lender's recovery to the property itself.

Yes. Mixed-use properties (e.g., retail on the main floor, residential above) are very common. Lenders evaluate both income streams, though they often require the commercial portion to be less than 50% of the square footage for certain residential-leaning programs.

MLI Select is a points-based mortgage insurance program for multi-family properties that offers incentives like lower premiums, higher LTVs (up to 95%), and longer amortizations (up to 50 years) for meeting affordability, accessibility, and energy efficiency targets.

Commercial deals take longer than residential. Expect 45 to 90 days from application to funding, depending on the complexity of the property and the speed of third-party reports like appraisals and environmental assessments.