By : Radu Arvatescu
If you are looking for your next investment, commercial multi-family home mortgages in Ontario could be your gateway. These mortgages can be used for new construction, refinancing, and purchasing existing developments. Multi-family homes, also known as multi-unit residences, can provide a reliable revenue stream with an indefinite return.
Find out which types of properties you can purchase, the advantages, and how to get the best mortgage rates.
Defining a Multi-Family Home
For the purpose of both insurance and mortgages, multi-family homes are typically defined as buildings that have five or more occupiable units.
There are several different variations, most of which can be covered by commercial multi-family home mortgages in Ontario.
Some examples include:
- Apartment buildings and block flats made up of multiple floors with individual units that vary in size and layout. The complex may have internal hallway access to units, or outside access running along the front of the building. Complexes can be mixed-use, featuring commercial space at the ground level with residential units above.
- Apartment developments can allow you to invest in a property that will have more than one multi-family home building on site. Structures are typically built to plan and can include shared amenities on-site, such as clubhouses, pools, recreation areas, gyms etc.
- Rowhouses and affordable housing units can be purchased with commercial multi-family home mortgages in Ontario. These designs are usually cost-effective and functional with few features intended for luxury or unnecessary aesthetic appeal.
- Nursing homes and retirement villages can be covered by some lenders. Connected units in a single complex are designed for retirement and long-term care.
How Much Can You Finance on Multi-Family Home Mortgages in Ontario?
Most lenders will finance up to 75% of the total cost of purchase or construction, leaving a deposit of 25%.
Refinancing is also available if you already own a property with a mortgage and want to take advantage of competitive interest rates. Expansion can also be financed with a multi-family home mortgage. Total available financing will depend on your existing equity, income, and debt.
What Are the Advantages of Owning a Multi-Family Property?
There are significant advantages to be gained from investing in a multi-family property. Whether investing in a small complex or a larger development, understanding these advantages could help you to make the right decision for your next commercial venture.
- You can generate consistent monthly cash flow from rental properties.
- The equity you build in a multi-family property could allow for expansion or new real estate investments.
- You can occupy a unit within the complex.
- A mixed-use property with commercial space could allow you to rent to lucrative business customers or run your own company from within the complex.
- Multi-family homes help to develop communities, especially if you invest in affordable housing. This can have a positive effect on the local economy.
The Best Way to Apply for Commercial Multi-Family Home Mortgages in Ontario
Any kind of commercial mortgage is more complex than its residential counterpart. In the case of multi-family homes, complexities increase even more. Outside of typical requirements like financial assessment and credit checks, lenders will want to guarantee the viability of the property as a long-term revenue stream.
Documentation needs can be extensive. Comparing mortgage options can be time-consuming, and near impossible if you already run a company from day-to-day.
A mortgage broker can help in this situation. As your representative, a broker will discover the best packages on the market before presenting each option to you. They will assist with documentation and handle the application process, acting as a liaison between you and lenders. Most importantly, a broker will work to secure the best rates and mortgage terms so that you can maximize your investment.
If you’re ready to step up in the real estate world, you can start by talking to a licensed Ontario broker today.
Lowest Residential Mortgage Rates in Canada*
|Term||OUR RATE||TD Bank Rate|
|3 Year Fixed/ 25 yrs||5.89%Promo||6.53%|
|4 Year Fixed/25 yrs||5.54% Promo||6.32%|
|5 Year Fixed/ 25 yrs||5.39% Promo||5.81%|
|5 Year Variable/ 25 yrs||6.20% Promo||7.15%|
|5 Year Fixed/ 30 yrs||5.99% Promo||6.39%|
|5 Year Variable/30 yr||6.80%||7.25%|
|3 Year Fixed/30yr||6.64% Promo||6.81%|
|**NEW RENTAL 5 Year Fixed /30yr||6.44% Promo||6.44%|
|** NEW RENTAL 3 Year Fixed /30yr||6.68% Promo||6.68%|
Updated: DEC 05 , 2023
* Current promotion rates may provide an additional 0.05% discount or may be anytime discontinued at the Lender discretion.Some condition may apply.Rates may vary between geographic regions and the posted rates on this website may not be available in your area.TD Bank rate used for comparable are the rate listed in the Broker Chanel Portal by TD Canada Bank at the date above. Please contact our MCI office for more details and current promotions.
LOWEST REGULAR RATES IN CANADA* * Current promotion rates may provide an additional 0.10% discount. Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.