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How Much Do You Have To Put Down On A Commercial Property?

Matrix Mortgage Global – How Much Do You Have To Put Down On A Commercial Property?

A commercial mortgage is a loan taken out on commercial real estate using the property itself as collateral. Commercial real estate refers to buildings and/ or land which is intended to generate a profit, be it from capital gain or rental revenue. The residential real estate can fall into this category if it is purchased as an investment property.

If you are looking to finance an office, retail space or industrial property, this is the mortgage you are looking for and we here at Matrix Mortgage Global can help!

How Much Do You Have To Put Down On A Commercial Property?

 

You can expect a down payment for a commercial property to be significantly higher than that of a residential property, due to the increased risk that the lender is taking. The borrower in these situations may be a company or business as opposed to an individual and the business may possibly involve partners. This means that assessing your credit history becomes more complicated which is another reason you can expect commercial mortgage rates to be significantly higher than that of residential ones.

For the reasons explained above, guidelines for financing a commercial property in Canada are also a bit more stringent than a residential property and most institutional leaders will have very firm qualification requirements in place- particularly with regards to the down payment, equity requirement and the property income requirement.

Obtaining actual rates for comparisons can be difficult when you are dealing with commercial mortgages because lending criteria are not generally advertised, and the terms and conditions can differ significantly. This is where having a commercial mortgage broker such as Matrix Mortgage Global, that specializes in office, industrial, retail and rental apartment properties will be able to help you find the best possible rates.

The bottom line:

There are a number of properties that fall into the classification of commercial properties so it is important to identify exactly what type of property you are looking to finance- that can greatly impact the amount of down payment required.

A brief rundown on some of the types of properties to consider:

  • Office
  • Industrial
  • Retail
  • Multifamily
  • Hotels
  • Land
  • Special -Purpose

A down payment on a mixed property typically falls between 20- 35%. A pure commercial property will most often be higher, closer to 50%. Your individual risk profile directly determines the down payment that is required of you.

Contact us today at Matrix Mortgage Global at 1-877-369-5478 and we can get started to see what options will work best for your needs!

 

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