Commercial Mortgage in Kelowna, BC
A commercial mortgage in Kelowna pays for property that earns income, such as a small apartment building in Rutland, a mixed-use building in South Pandosy, or the shop your business runs from downtown. If you're bringing equity from Vancouver or Alberta, lenders will want to see where that money comes from. Income from short-stay guests can open the widest gap between what you hope to borrow and what a lender offers, so we check where your rent comes from before we pick a lender, which saves you from building a plan around income a lender won't count.
Will a lender count short-term rental income?
Many lenders count long-term leases at close to full value. They treat nightly or weekly income with caution, if they count it at all. Some lenders will use it with a track record of 2 years of tax returns behind it, while others ignore it and size the loan on long-term rent. Ask us before you build a purchase around guest bookings in Lower Mission or near the lake, because that question can change your loan amount.
How much do I need to put down?
Most lenders want more than the 20% minimum that applies to a home priced at $1.5 million or more, and the figure depends on the building's income and its type. Equity in your current home can help, and a mortgage refinance in Kelowna can free it up before you write an offer. Keep cash aside for BC's property transfer tax too, which is 1% on the first $200,000 and 2% on the next portion up to $2 million.
Can CMHC insure a Kelowna rental building?
For buildings with 5 or more units, Canada Mortgage and Housing Corporation (CMHC) offers MLI Select. You need at least 50 points from affordability, energy efficiency and accessibility, and the top tier allows an amortization of up to 50 years, which can lower the payment a lot compared with a conventional loan. A new build in Glenmore can earn its energy points more easily than an older walk-up, and our MLI Select guide walks through it.
Book a free call about your Kelowna property
Send us the address and how it's rented today, long term or short stay, and we'll tell you which lenders fit. Book a free call, or dial 604-262-3500 from anywhere in the Okanagan.
Flow Mortgage Co. arranges mortgages through BRX Mortgage Inc., licensed with the BC Financial Services Authority.
Frequently asked questions
Do commercial mortgages come with a fee?
Commercial deals can carry a broker fee because the lender doesn't pay us on every loan, and you'll hear about it on the free first call and see it in writing before you sign.
Can I buy the building my business runs from?
You can, and lenders will read your company's last 2 years of financial statements and tax returns alongside the building, so bring your accountant in before you make an offer on a unit downtown or in Rutland.
What happens when the term ends?
You'll renew or switch, the same as on a home, and we start that conversation months before the date (our page on mortgage renewal in Kelowna explains the steps).