Commercial Mortgage in Vancouver, BC
A commercial mortgage in Vancouver is the loan you'd use to buy or refinance a small apartment building, a mixed-use property with shops below and suites above, or the space your business works out of. Lenders weigh the building's rent and your company's income as heavily as your personal credit. On an older mixed-use building in Mount Pleasant or Grandview-Woodland, a lender's first questions can be about the ground-floor tenant and how long their lease has left. We build the file around those answers before it goes out, so you hear back from lenders who are comfortable with that kind of building.
How much do I need to put down on a commercial building in Vancouver?
Most lenders ask for a larger down payment on commercial property than the 20% a buyer needs on a home priced at $1.5 million or more. If you own a Vancouver home or rental with equity in it, a mortgage refinance in Vancouver can fund part of that down payment, so we plan both loans together. Budget for BC's property transfer tax as well, at 1% on the first $200,000 and 2% on the part from $200,000 up to $2 million. The first-time buyer exemption is for homes, so plan on the full tax.
How will a lender look at the building's rent?
Lenders start with the rent the building collects today, subtract what it costs to run it (property tax, insurance, repairs and management), and check that what's left covers the mortgage payment with room to spare. A signed commercial lease with years left on it can carry more weight with some lenders than a month-to-month tenant paying the same rent, so collect copies of every lease before you write an offer.
Can CMHC insure a Vancouver apartment building?
Canada Mortgage and Housing Corporation (CMHC) insures rental buildings with 5 or more units through MLI Select. A building earns points for affordability, energy efficiency and accessibility, and it needs at least 50 points to qualify. More points can mean a larger loan and a longer amortization, up to 50 years at the top tier. On an older Kitsilano or West End walk-up, the energy points usually depend on the upgrades you're planning, so bring your renovation quotes to the first call. Our MLI Select guide has the scoring.
Book a free call about your Vancouver building
Send us the address and the rent roll, and we'll tell you which lenders fit the building and whether a fee applies. Book a free call or phone 604-262-3500.
Flow Mortgage Co. arranges mortgages through BRX Mortgage Inc., licensed with the BC Financial Services Authority.
Frequently asked questions
Is there a fee for a commercial mortgage?
Some commercial deals carry a broker fee, because the lender doesn't pay us on every commercial loan. We'll tell you on the first call if yours is likely to have one, and you'll see any fee in writing before you sign anything, and the first call is free.
Can I buy the space my business runs from?
Yes, and lenders call that an owner-occupied purchase. They'll read your company's last 2 years of financial statements, so ask your accountant for them now.
What if a sale is paying for part of the purchase?
When money from selling another property arrives after you close, bridge financing in Vancouver can cover that gap with some lenders.