Get Bigger Loans for Your Business with Commercial Mortgages in Toronto

We connect businesses, investors, and developers with lenders for getting Commercial Mortgages in Toronto, the GTA, and across Ontario.

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    Commercial Mortgages
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    Commercial Mortgages

    Commercial real estate financing sometimes requires more work than residential financing. Easy. Our in-house commercial specialists will take care of it all.

    Get Advice From In-House Commercial Specialists

    Looking for a team to help you know more about what Commercial Mortgages Toronto are? Look no further than ORION Financial! Our expert professionals have years of experience working in commercial mortgages, providing our clients with suitable rates and terms for their unique financing needs. 

    Whether you are looking to buy commercial property, refinance an existing mortgage, or access funds to invest in your business, we are here to help.

    Your Personal Solution For Private Mortgage Loans

    Personalized Commercial Mortgages in Ontario

    Commercial real estate private mortgages sometimes require more work than residential financing. Our commercial mortgage brokers in Ontario can help you successfully navigate all the steps involved in commercial mortgages in toronto. From determining your financing needs and navigating through the paperwork process to securing competitive interest rates and terms for commercial mortgages, our team will be with you every step of the way.

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    What is a Commercial Mortgage?

    A commercial mortgage is a specialized financial instrument designed to facilitate real estate transactions for businesses. In contrast to residential mortgages designed for buying homes, commercial mortgages are customized to suit the specific requirements of businesses aiming to purchase or refinance commercial properties.

    These loans are typically used for a variety of purposes, including purchasing office spaces, retail outlets, industrial facilities, or even land for development. Commercial mortgages come with terms and conditions that vary from residential mortgages, often featuring flexible repayment schedules and interest rates based on the financial health of the business.

    Commercial mortgages in Toronto are a crucial tool for businesses in Toronto, allowing them to expand their operations, invest in real estate, or optimize their existing property holdings. Understanding how commercial mortgages work can help businesses make smart financial choices and get the right funding for their commercial properties.

    Difference Between Residential and Commercial Mortgages

    When considering commercial mortgages for your business or investment pursuits, it’s crucial to be aware of the distinct requirements that set them apart from residential mortgages. 

    Loan-to-Value (LTV) Ratio: Commercial mortgages rely significantly on the Loan to Value (LTV) ratio, a vital metric for lenders. It determines the maximum loan amount based on your collateral’s market value, calculated by dividing the loan amount by the asset’s value. While conventional banks require 25-35% equity for commercial real estate financing, our offerings extend a more flexible approach. We provide options that allow for LTV ratios as high as 90-95% for both purchases and refinances of owner-occupied commercial real estate.
    Higher Down Payment: Commercial mortgages typically require a larger down payment. For example, mixed-use properties often require down payments ranging from 20% to 35%, while purely commercial ventures may demand a more substantial 50% down payment. This reflects the increased commitment inherent in commercial real estate endeavors.

    Interest Rates: Commercial mortgage rates in Ontario are usually higher than those for residential mortgages but lower than what you’d see with construction loans. These rate differences reflect the varying levels of risk.

    Maximum LTV and Term: Commercial mortgage lenders often cap the LTV at around 75%, and the loan term is usually 1-5 years, with payments calculated at 20 or 25-year amortizations.This structure helps balance risk and your financial needs.

    How To Qualify for Commercial Mortgages in Toronto?

    Qualifying for a commercial mortgage involves meeting specific criteria and demonstrating financial stability. In this process, a commercial mortgage broker in Ontario can serve as an invaluable ally, leveraging their expertise to help applicants navigate the complexities of the commercial mortgage landscape, ultimately increasing your chances of securing the financing you need.

    • Maintain a good personal and business credit history to prove your creditworthiness to lenders.

    • Create a comprehensive business plan that outlines your goals and demonstrates how the property fits into your strategy

    • Provide financial statements for your business, including income statements, balance sheets, and cash flow statements.

    • Identify and provide details about the property you intend to use as collateral, including appraisals and surveys.

    • The commercial real estate market is currently very strong, with increasing demand and limited supply driving up property values. This makes commercial properties a great investment option for those looking to secure their financial future through real estate.

    • Be ready to make a substantial down payment, often ranging from 20% to 50% of the property's purchase price.

    • Ensure your property's net operating income (NOI) comfortably covers the mortgage payments with a DSCR above 1.25.

    • Offer a personal guarantee, especially if your business lacks an extensive credit history.

    • Select a lender that specializes in commercial mortgages and aligns with your industry.

    Benefits of Acquiring A Commercial Property

    • Commercial properties typically generate more income than residential properties, making them an attractive choice for investors and businesses seeking to maximize their profits.

    • Another advantage of commercial real estate is the flexibility and customization it offers. Whether you are looking for a commercial property to buy or rent, commercial real estate can be tailored to suit your needs and preferences.

    • Investing in commercial real estate provides long-term stability, as commercial properties tend to retain their value over time. This makes commercial properties a great choice for investors who want to protect their investments while achieving solid returns over time.

    • Acquiring commercial property often gives you access to specialized financing options that are not typically available with residential properties. This can open up a world of opportunities, allowing you to finance larger projects or take on more risk when necessary in order to maximize your ROI.

    • The commercial real estate market is currently very strong, with increasing demand and limited supply driving up property values. This makes commercial properties a great investment option for those looking to secure their financial future through real estate.

    • Commercial property often offers stable and predictable income. Whether you are looking for cash flow from rental properties or a steady stream of revenue from a commercial lease, commercial real estate can help you generate a consistent source of income over time.

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    What are the Payment Options for Commercial Mortgages?

    Fixed Rate Loans

    Fixed Rate Loans

    These commercial mortgages offer a set interest rate and payment terms over the duration of the loan. They can be a good choice for commercial property owners who want predictability and stability in their financing.

    Variable Rate Loans

    Variable Rate Loans

    With these commercial mortgages in Toronto, the interest rate may change based on market conditions or other factors. This type of commercial mortgage toronto may offer lower rates in exchange for greater risk and is often used by commercial real estate investors looking to maximize returns.

    Balloon

    Balloon Payments

    Commercial properties that require large upfront investments, such as commercial office buildings or retail spaces, often take out balloon payment loans to finance construction or renovation projects. These loans have fixed interest rates but require a single, large repayment at the end of the loan term.

    Are Commercial Mortgages Riskier Than Residential Mortgages for Lenders?

    Commercial mortgages in Toronto pose greater risks to lenders compared to residential mortgages due to several key factors. Firstly, commercial properties are often used for business purposes, making their income streams less predictable than residential properties primarily occupied by homeowners. Businesses may experience fluctuations in revenue, affecting their ability to make consistent mortgage payments.

    Secondly, commercial properties are generally more expensive than residential homes, requiring larger loans and down payments. This increased financial exposure to lenders amplifies potential losses in case of default.

    Moreover, commercial property values are susceptible to market fluctuations, impacting loan-to-value ratios. Changes in lease agreements and tenant stability can also affect property income, adding another layer of uncertainty.

    Finally, the success of commercial mortgage repayment is heavily reliant on the performance of the borrower’s business or the rental income generated by the property. Lenders recognize these heightened risks and, therefore, impose stricter lending criteria and charge more interest on commercial mortgages as a safeguard.

    What Is

    What is Risk-Based Capital (RBC) For Commercial Mortgages?

    Commercial mortgages can be a great way to finance your commercial property projects, but it’s important to understand the risks involved. Risk-based capital is one of the key factors lenders take into account when assessing commercial mortgage applications and refers to the amount of risk that commercial properties pose to a lender or investor. 

    This measure assesses the risk that commercial properties pose to a lender or investor and can impact the interest rate and other terms of a commercial mortgage. At its core, RBC evaluates the financial stability and long-term viability of commercial properties based on factors such as cash flow, debt levels, property value, and market conditions. 

    As such, it is essential to carefully evaluate your commercial property before applying for commercial mortgages toronto in order to ensure you are able to secure the financing you need.

    Know What Others Are Saying

    Had the best experience with Maksim and his staff. Everything was quick and easy. Maksim is well-connected and finds the best lending solutions for your needs. He follows up every step of the way to ensure you're not missing any deadlines. Definitely, someone who goes above and beyond! Thank you so much!

    Marie H

    Marie H

    Hands down best mortgage service in the city. Maks and the team helped me with my closing and provided a variety of different lenders. No matter how complex your situation is, they can help get it done!! Looking forward to future support

    Rano U

    Rano U

    I reached out to Maksim after being referred by a friend of mine. Maksim was great to work with! Got us a great rate and was there to answer questions along the way (house finances are stressful enough to deal with). Made the process quite a bit easier for us. We had a great experience the first time around, so we've now actually used him for 2 mortgages. I don't see a need to seek anyone else!

    Imad Khalil

    Imad Khalil