Commercial Mortgages
A Comprehensive Guide for Businesses and Investors
Navigating the world of commercial mortgages can be complex, but it’s also an essential step for businesses and investors looking to expand their operations or invest in income-generating properties. At Better Mortgages, we provide the knowledge, expertise, and tailored solutions to help you make informed decisions.
As Warren Buffett aptly said, “Risk comes from not knowing what you’re doing.” Our goal is to empower you with the knowledge and tools you need to approach commercial mortgages with confidence.
What Are Commercial Mortgages?
A commercial mortgage is a loan secured by commercial property, such as:
- Office buildings
- Retail spaces
- Industrial facilities
- Multi-family residential buildings with five or more units
Unlike residential mortgages, commercial mortgages are designed for business purposes, focusing on the property’s income potential and the borrower’s financial stability.
Key Differences Between Commercial and Residential Mortgages
| Aspect | Commercial Mortgages | Residential Mortgages |
| Property Type | Non-residential or multi-family (5+ units) | Single-family homes or small residential units |
| Risk Assessment | Based on property income and borrower/business stability | Based on borrower credit and income |
|
Terms & Interest Rates |
Typically, 5–25 years; rates depend on property risk and borrower creditworthiness | Longer terms (up to 30 years); lower interest rates |
| Down Payment | Usually 20%–40% | As low as 5% for insured loans |
| Amortization Period | 15–25 years | Up to 30 years |
The CMHC MLI Select Program
The MLI Select Program by the Canada Mortgage and Housing Corporation (CMHC) is a groundbreaking initiative designed to encourage the development and preservation of affordable multi-unit rental housing in Canada.
The program provides mortgage loan insurance for eligible multi-unit rental properties, allowing investors and developers to access financing with lower down payments and competitive interest rates.
Key Features of the MLI Select Program:
Eligible Properties
Multi-unit residential properties with 5 or more units, properties combining residential and commercial spaces, and both
newly constructed and existing
properties are eligible.
Scoring System for Enhanced Benefits
The MLI Select Program scores properties based on affordability (below-market rents), energy efficiency (sustainable practices or retrofits), and accessibility (enhancements for disabilities) to determine
eligibility and benefits.
Flexible Loan-to-Value
(LTV) Ratios
Eligible properties can qualify for up to 95% LTV with high affordability and sustainability, requiring a lower down payment of 5%–15%, well below traditional commercial
mortgage standards.
Competitive
Interest Rates
Borrowers gain access to some of the lowest commercial mortgage rates on the market
due to CMHC insurance.
Extended
Amortization Periods
Amortizations of up to 50 years are available for top-scoring properties, reducing monthly payments and improving cash flow.
Mortgage Insurance Premiums
Linked to Benefits
Insurance premiums are discounted for properties achieving higher affordability, energy efficiency, and accessibility scores.
Streamlined
Application Process
CMHC offers a simplified and efficient application process to encourage participation
in the program.
How Better Mortgages Can Help with MLI Select
Navigating the MLI select program requires in-depth knowledge of CMHC guidelines and scoring criteria. At Better Mortgages, we offer:
Expert Guidance
Our team understands the intricacies of the program and can help you maximize the benefits available to your property.
Customized Solutions
We’ll analyze your project’s
potential score to secure
the most favorable terms.
End-to-End Support
From initial evaluation to application submission, we’ll guide you every
step of the way.
Is a Commercial Mortgage Right for You?
Commercial Mortgages and programs like MLI Select are ideal for:
Real estate investors seeking
to expand their portfolio
Developers building or retrofitting
multi-unit residential properties
Business owners looking
to acquire or renovate
commercial spaces
Whether you’re an experienced investor or new to commercial real estate,
our team is ready to help you identify the best financing options for your goals.
Take the Next Step with Better Mortgages
Explore the possibilities of commercial mortgages and unlock the benefits of programs like CMHC’s MLI Select. At Better Mortgages, we combine decades of expertise with cutting-edge insights to deliver solutions that work for you.
Choose a Better Mortgages representative to work with, or contact us today to schedule a consultation.
Let’s make your commercial real estate vision a reality.