If you own a business in Ontario and you’re shopping for commercial financing, you’ve probably noticed something frustrating: nobody posts commercial mortgage rates. Unlike residential mortgages, where you can compare five-year fixed rates in about thirty seconds, commercial rates live behind closed doors. Every lender prices differently. Every deal is custom.

That opacity costs business owners real money. Without a benchmark, it’s hard to know whether the quote in front of you is fair or whether you’re paying two points more than you should. In this guide, we’ll pull back the curtain on how commercial mortgage rates work in Canada, what drives them up or down, and what to do when traditional commercial lending doesn’t fit. If you’d rather skip ahead and talk numbers specific to your situation, book a call with Shawn Allen and we’ll walk through your options together.

What Are Commercial Mortgage Rates in Canada Right Now?

Commercial mortgage rates in Canada generally range from prime plus 1% to prime plus 4%, with the Bank of Canada’s prime rate serving as the anchor. As of late 2024, following Bank of Canada rate cuts, prime sits at 5.95%, putting most commercial rates between roughly 6.95% and 9.95% depending on risk profile.

That’s a wide spread — and it’s intentional. Commercial lenders price each deal individually because commercial properties carry more variables than residential ones. A multi-unit apartment building in Toronto with stable tenants prices very differently than a startup restaurant leasehold in Hamilton.

Typical Rate Ranges by Property Type

• Multi-family residential (5+ units): Prime + 0.75% to prime + 2% — the lowest commercial rates, because lenders view these as closest to residential risk
• Retail plazas and mixed-use: Prime + 1.5% to prime + 3%
• Office buildings: Prime + 2% to prime + 4% — higher due to vacancy concerns in many Canadian markets
• Industrial and warehouse: Prime + 1.25% to prime + 2.5%
• Owner-occupied business premises: Prime + 1% to prime + 2.5%, often with the best terms since the borrower’s business success is tied to the property

These are general ranges. Your actual rate depends on the factors below — and on which lender you approach. According to CMHC’s 2024 Mortgage Consumer Survey, business owners who work with a mortgage broker report higher satisfaction with their financing terms than those who go directly to a single lender.

What Determines Your Commercial Mortgage Rate?

Your commercial mortgage rate is determined by five core factors: loan-to-value ratio, property type and condition, borrower financial strength, lease or tenant profile, and lender appetite. Lenders weigh each factor and price the risk accordingly — a strong deal in all five categories earns the lowest rate.

1. Loan-to-Value Ratio (LTV)

Most Canadian commercial lenders cap LTV at 65% to 75% for standard properties, and 75% to 80% for multi-family. The more equity you bring, the lower your rate. A borrower putting 35% down will almost always beat a borrower putting 20% down.

2. Property Type and Condition

Special-purpose properties — churches, gas stations, golf courses — carry higher rates because they’re harder to sell if the lender needs to recover funds. Standard properties in good condition price better.

3. Borrower Financial Strength

Lenders review your business financials, personal credit score, net worth, and liquidity. A borrower with a 750+ credit score, two years of profitable financials, and cash reserves will access rates at the low end of the range.

4. Lease and Tenant Profile

Long-term leases with creditworthy tenants — think a national bank branch or government office — lower your rate. Month-to-month leases with small local businesses raise it.

5. Lender Appetite

Banks, credit unions, private lenders, and mortgage investment corporations (MICs) each have different appetites. A deal that one bank declines outright might get funded at a competitive rate by a credit union that specializes in your industry.

How Do Commercial Mortgage Rates Differ From Residential Rates?

Commercial mortgage rates are typically 1% to 3% higher than residential rates, come with shorter amortization periods (often 20 to 25 years versus 25 to 30), and are usually reviewed or renewed every 1 to 5 years. The higher pricing reflects increased risk, less standardization, and fewer government-backed insurance options.

There’s also a practical difference: residential borrowers can access default insurance through CMHC, Sagen, or Canada Guaranty, which lowers lender risk and therefore rates. Commercial borrowers generally can’t — except for multi-family properties with 5+ units, which can qualify for CMHC’s MLI Select program.

What If Traditional Commercial Lending Doesn’t Work for You?

When a bank declines your commercial mortgage application — or offers terms that don’t work — many business owners assume their only option is a high-rate private lender. That’s not always true. If you own a home with equity, Matrix Mortgage Global’s H.E.L.P. (Home Equity Loan Program) can unlock that equity to fund your business, consolidate high-interest debt, or bridge a cash-flow gap without selling or disrupting your residential mortgage.

Here’s how it works in practice. Say you own a home worth $900,000 with a $520,000 mortgage balance. That leaves $380,000 in equity. Through H.E.L.P., you could access $125,000 of that equity to pay down business debt, cover a commercial down payment, or stabilize cash flow during a slow quarter — all while keeping your existing low-rate first mortgage in place.

The outcome: instead of scrambling for a 9% or 10% commercial loan, you’re using equity you already built at a fraction of the cost. Your monthly payments simplify. Your business gets breathing room. And you stay in control of your home.

When H.E.L.P. Makes Sense for Business Owners

• Your bank declined your commercial application due to industry, time-in-business, or credit history
• You need capital quickly and don’t want to wait 60–90 days for commercial underwriting
• You’re carrying high-interest business credit cards or merchant advances
• You want to fund a commercial down payment without liquidating investments
• You’re self-employed and traditional income verification is a hurdle

H.E.L.P. is not a second mortgage in the traditional sense — it’s a structured home equity solution designed to improve cash flow, not add pressure. We look at the whole picture: your equity, your income, your goals.

How Can You Get the Best Commercial Mortgage Rate in Canada?

The best commercial mortgage rate in Canada comes from working with a broker who has access to multiple lenders and understands how to present your deal. Rates vary by 2% or more between lenders for the same property, so shopping the market is the single highest-leverage move you can make.

Steps to Secure a Competitive Rate

• Prepare clean financials: Two years of business tax returns, current P&L, and a balance sheet. Lenders price messy files higher.
• Strengthen your personal profile: Pay down personal credit cards, avoid new credit inquiries, and document your net worth.
• Bring more equity: Every 5% you add to your down payment typically improves your rate.
• Consider a co-signer or guarantor: A strong guarantor can move your file from decline to approval — and from high-rate to low-rate.
• Work with a broker, not a single lender: One bank gives you one rate. A broker gives you the market.

According to the Bank of Canada’s 2024 Financial System Review, commercial real estate lending conditions tightened through 2023 and 2024, making broker access even more valuable for borrowers who don’t fit the standard bank box.

What Documentation Do You Need for a Commercial Mortgage?

Commercial mortgage applications in Canada require business financial statements, personal tax returns, a property appraisal, lease agreements, and a business plan or operating history summary. Lenders use these documents to assess risk and set your rate — incomplete files slow down approvals and often price higher.

If your documentation is thin — say you’re newly self-employed or your business had a rough year — H.E.L.P. can often work with less paperwork because the equity in your home does much of the qualifying work.

Frequently Asked Questions