Commercial mortgages are approved based on property income + borrower strength
Typical down payments are often 20%–35% depending on property and risk
Terms are commonly 3–10 years, with amortizations that can be longer
Lenders focus on NOI, DSCR, lease quality, and vacancy
Multi-unit rental financing may qualify for programs like CMHC MLI Select
The “best deal” is the one with the right rate + term + flexibility + exit plan
A commercial mortgage is financing used to buy, refinance, or build property that’s used for business or investment purposes—like retail plazas, office buildings, industrial warehouses, and multi-unit residential rentals. Commercial lending is approved differently than residential mortgages because lenders focus heavily on property income, business financials, and risk.
At Citadel Mortgages, we help Canadian businesses and investors compare commercial mortgage options across banks, credit unions, trust lenders, and private capital—so you get the right structure, not just a rate.
A commercial mortgage is a loan secured by a property used for:
Business operations (owner-occupied commercial real estate), or
Investment income (rent-producing property)
Commercial mortgages are structured around:
Net Operating Income (NOI)
Debt Service Coverage Ratio (DSCR)
Lease terms, tenant strength, and vacancy risk
Borrower financials, net worth, and experience
Multi-Unit Residential (5+ units): purpose-built rentals, apartments, mixed residential projects
Retail: plazas, strip malls, storefronts
Office: owner-occupied or leased office buildings
Industrial: warehouses, manufacturing, distribution
Mixed-Use: retail + residential combinations
Specialty: hotels/motels, medical, certain niche assets (case-by-case)
Commercial rates are priced based on risk. Key factors include:
Property type (multi-unit often prices differently than retail/industrial)
Location and market strength
Lease profile (tenant quality, remaining term, vacancy)
NOI and DSCR strength
Loan-to-value (LTV) and down payment
Borrower strength (credit, net worth, liquidity, experience)
Term length and amortization
Commercial mortgages are custom-underwritten, but common ranges include:
Down payment / equity: often 20%–35%
Terms: commonly 3–10 years
Amortization: varies by lender and asset type
Recourse: may be full, partial, or limited depending on deal strength
Prepayment penalties: often higher or more structured than residential
Best for businesses buying property to operate from. Lenders focus on:
business financials and stability
industry risk
owner strength and liquidity
Best for income properties. Lenders focus on:
rent roll, NOI, vacancy
lease strength and market rents
DSCR and property performance
For multi-unit rental properties, financing can be structured through:
conventional commercial lenders, or
insured/commercial programs when eligibility fits
If the property and project meet requirements, CMHC MLI Select may provide enhanced terms for qualifying multi-unit rental projects.
Lenders typically assess:
business financial statements (often 2–3 years)
tax filings (corporate and/or personal)
net worth and liquidity
credit profile
experience managing similar assets
appraisal and marketability
rent roll + lease agreements
NOI (income minus operating expenses)
DSCR (ability to service the debt)
vacancy history and tenant quality
purchase price vs appraised value
requested LTV
term, amortization, and exit plan
Prepare these key documents to streamline the application process:
At Citadel Mortgages, we specialize in a wide range of commercial mortgage products designed to help you finance, build, or expand your property portfolio. Our top solutions include:
🏘️ CMHC MLI Select Mortgages – Get up to 95% LTV and 50-year amortizations for energy-efficient, accessible, and affordable multi-unit rentals.
🏨 Hotel & Motel Mortgages – Finance the purchase, refinance, or renovation of hospitality properties across Canada.
🏙️ Mixed-Use Property Mortgages – Ideal for buildings that combine commercial storefronts and residential units.
🏗️ New Home Construction & Development Mortgages – From raw land to final occupancy, we fund custom home builds and multi-unit developments.
Whether you’re a first-time investor or a seasoned developer, Citadel Mortgages offers tailored, expert-backed solutions to get your project funded — fast.
Discovery & target structure (property type, NOI, exit strategy)
Pre-review (DSCR/LTV fit, lender match)
Document collection (rent roll, leases, financials)
Lender term sheet (rate, term, amortization, conditions)
Due diligence (appraisal, environmental, legal review)
Final approval & closing (lawyer + lender conditions)
Penalty exposure if you refinance/sell early
Shorter terms than residential (renewal risk)
Vacancy risk impacting DSCR
Rate reset risk at renewal
Covenants (cash flow, reporting, reserve requirements)
For consumer mortgage education (rates, borrowing costs, and protections), reference federal guidance.
“The best commercial mortgage is rarely the lowest rate. In commercial lending, the winning deal is the one with the right risk structure: stable term, manageable covenants, sensible prepayment terms, and an exit plan that protects cash flow.”
Most commercial mortgages range from 5 to 10 years, with amortization periods of up to 25 years.
Often 20%–50%, depending on property, DSCR, and lender appetite. If you’re new to commercial lending with little to no experience, expect a 35%- 50% down payment requirement.
Yes, commercial rates are generally higher due to increased risk, but Citadel Mortgages works to secure the most competitive rates.
Yes, refinancing can help lower your interest rate, consolidate debt, or access equity for business growth.
Yes, an independent appraisal is required to determine the property’s market value.
Mainly through income performance (NOI/DSCR), lease quality, and borrower strength.
| Metric | Value |
|---|---|
| Average Commercial Loan Size | $1.2 million |
| Typical Down Payment Required | 25%-35% |
| Average Fixed Rate (5-Year) | 5.75% |
| Loan Approval Rate | 85% (businesses with strong financials) |
We connect you with Canada’s leading banks, credit unions, and private lenders for competitive rates.
Our experts craft a mortgage strategy that aligns with your business objectives.
From application to closing, we simplify the process, saving you time and effort.
Benefit from promotional rates and flexible terms available only through Citadel Mortgages
Tell us what you’re financing (property type, location, purchase/refi, rent roll/NOI if applicable). We’ll match you with commercial lenders and structure the right term sheet.