What Is a Commercial Mortgage?
A commercial mortgage is a loan secured by commercial or income-producing real estate rather than a primary residence. In British Columbia, commercial mortgages cover everything from strip malls and office buildings to multi-family apartment complexes, industrial warehouses, and mixed-use properties.
Unlike residential mortgages, commercial deals are evaluated primarily on the property’s ability to generate income rather than the borrower’s personal income. This means lenders focus on metrics like Net Operating Income (NOI), Debt Service Coverage Ratio (DSCR), and capitalization rates.
How Commercial Differs from Residential
The biggest difference is qualification criteria. Residential lenders use your personal Gross Debt Service (GDS) and Total Debt Service (TDS) ratios. Commercial lenders care about the DSCR — whether the property’s income covers the debt payments by at least 1.2x.
Commercial mortgage rates are typically 0.5% to 2% higher than residential rates, and terms can range from 1-year bridge financing to 10-year fixed terms. Down payments start at 20-25% for stabilized properties and go up to 35-50% for riskier deals like raw land or construction.
- DSCR (Debt Service Coverage Ratio): NOI divided by annual debt payments. Most lenders require 1.2x minimum.
- Cap Rate: NOI divided by property value. Helps determine whether the purchase price is fair.
- NOI (Net Operating Income): Total income minus operating expenses, excluding mortgage payments.
- LTV (Loan-to-Value): Typically maxes out at 75% for institutional commercial lenders.
Types of Commercial Properties We Finance
At E7 Mortgages, we arrange financing for virtually every type of commercial real estate in BC. This includes retail properties (strip malls, shopping centres), office buildings, industrial and warehouse spaces, mixed-use properties, multi-family apartment buildings (5+ units), construction projects, and raw development land.
We also arrange business acquisition loans, inventory financing, and equipment loans for operating companies looking to expand.
Why Use a Mortgage Broker for Commercial Deals?
Commercial lending is fragmented across dozens of lenders — banks, credit unions, private lenders, pension funds, and specialty finance companies. Each has different appetites for property types, geographies, and risk profiles. A broker like E7 Mortgages knows which lenders are active, what terms they offer, and how to package your deal for the best outcome.
We handle the financial packaging, coordinate appraisals and environmental reports, and manage the entire process from application to funding. Our relationships with 30+ lender partners mean competitive bidding on your deal.
Get Started
If you have a commercial deal in BC, contact E7 Mortgages for a free consultation. We’ll review your deal, tell you exactly what’s possible, and outline the steps to get funded. Call (778) 834-9618 or WhatsApp us anytime.