Cedar Commercial

What does a commercial mortgage broker do?

A commercial mortgage broker works on behalf of the borrower to arrange financing for commercial real estate. This includes analyzing the deal, preparing a lender-ready submission package, presenting the file to multiple lenders, negotiating terms, and coordinating the transaction through to closing. The broker's job is to get you the best available rate, leverage, and structure for your specific property and financial situation.

How much does a commercial mortgage broker charge?

Most commercial mortgage brokers charge a fee of 0.50% to 1.50% of the loan amount, depending on the size and complexity of the transaction. For conventional deals placed with banks or credit unions, the fee is typically at the lower end of that range. More complex transactions involving private lenders, bridge financing, or creative structuring may carry higher fees. In many cases, the lender also pays the broker a commission, which can offset or eliminate the borrower's direct cost.

How long does a commercial mortgage approval usually take?

Timelines depend on the lender and the complexity of the deal. Bank and CMHC-insured financing typically takes four to eight weeks from application to funding. Private and bridge loans can close in as little as one to three weeks. Having a properly packaged submission with complete financials and property documentation is the single biggest factor in keeping the timeline on track.

What is the minimum down payment for a commercial mortgage in Canada?

Most conventional commercial lenders require a minimum down payment of 25%, which translates to a maximum loan-to-value (LTV) ratio of 75%. CMHC-insured financing for qualifying rental properties can allow higher leverage, sometimes up to 85% LTV. Private lenders set their own requirements, which may be higher or lower depending on the property and the borrower's situation.

What credit score do I need for a commercial mortgage?

Institutional lenders (banks, credit unions) generally look for a personal credit score of 650 or higher, though the property's income and the deal's overall strength matter more than personal credit alone in commercial lending. Private lenders place less emphasis on credit scores and focus more on the property's value and the borrower's equity position. If your credit is a concern, we can advise on which lenders are the best fit.

How is a commercial mortgage different from a residential mortgage?

Commercial mortgages are underwritten based on the property's income (net operating income, debt service coverage ratio) rather than primarily on the borrower's personal income. They typically have shorter terms (1 to 10 years vs. 25 to 30 years for residential), require larger down payments, and involve more detailed documentation. Rates are generally higher than residential rates because of the additional risk, and prepayment penalties are structured differently.

Can I refinance a commercial property to access equity?

Yes. Commercial mortgage refinancing allows you to access the equity in your property without selling it. Funds from a refinance can be used for renovations, acquisitions of additional properties, business working capital, or debt consolidation. The amount you can access depends on the property's current appraised value, its income, and the lender's maximum LTV ratio.

What is the current commercial mortgage rate in Canada?

Commercial mortgage rates are not a single number. They are calculated as a base rate plus a lender spread. Fixed rates use the Government of Canada bond yield (or Canada Mortgage Bond yield) as the base, while variable rates are typically priced off Prime or CORRA . Your specific rate depends on the property type, loan-to-value ratio, debt service coverage, term length, and overall deal strength. For current base rates and a sense of typical lender spreads, visit our Rates page .