If you choose to pursue a commercial mortgage, there are specific criteria that you will have to satisfy. The bar is set quite high as the value of loans is considerably higher.
TypeMax-Loan-to-Value RatioStorefront with Apartments/ Residential Commercial (Mixed) Individuals80%Multi-family residential (1-4 units)See Investment PropertyMulti-family residential (5 or more units)85%Commercial plaza mortgage75%Office mortgage75%Industrial mortgage75%Farm land mortgage55%Construction projectN/A--
Insurance for a commercial property is more complicated than with a residential property.For instance, CMHC won’t insure a pure commercial property. However, they may insure a mixed residential - commercial property with a down payment as low as 15%.With a personal residential property, the lender can be assured that the borrower will make mortgage payments a priority. However, with a commercial mortgage, it is easier for the borrower to declare bankruptcy is business isn’t going well and default. So, lenders need the security in the form of insurance.