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Commercial Mortgage LTV Guide
Maximum loan-to-value ratios and typical rate ranges for every major commercial property type in Canada.
LTV Overview
LTV & Rate Ranges by Property Type
Each property category carries different risk characteristics, which directly affect how much a lender is willing to advance and at what rate.
| Property Type | Max LTV | Typical Rate Range | Notes |
|---|---|---|---|
| Multi-Family (CMHC Insured) | Up to 85% | 3.50% – 5.50% | Highest available LTV through CMHC insurance. Requires 5+ residential units, must meet CMHC underwriting standards. Insurance premium added to loan balance. Up to 40-year amortization. |
| Multi-Family (Conventional) | Up to 80% | 4.50% – 6.50% | Standard institutional financing without CMHC insurance. No insurance premium. Faster processing and fewer restrictions than insured programs. |
| Office | Up to 80% | 4.75% – 7.00% | Rates and leverage depend heavily on tenant quality, lease terms, and occupancy. Single-tenant properties with strong credit tenants may achieve better terms. |
| Retail | Up to 80% | 4.75% – 7.50% | Grocery-anchored and essential service retail command better terms. Strip malls and single-tenant retail depend on lease length and tenant creditworthiness. |
| Industrial | Up to 80% | 4.50% – 6.75% | Currently a favored asset class among institutional lenders. Strong demand for warehouse and logistics space supports aggressive pricing. Owner-occupied properties may qualify for enhanced programs. |
| Hotels & Hospitality | 65% – 70% | 5.50% – 9.00% | Operating businesses with revenue volatility command lower LTV. Flagged properties with major brand affiliations receive better terms than independent operators. |
| Construction | Up to 80% | 6.50% – 12.00% | LTV based on completed or as-if-complete appraised value. Actual advance rates on cost are typically 65% to 80%. Draws released based on construction milestones and inspections. |
| Land (Raw & Serviced) | Up to 70% | 7.00% – 14.00% | Raw land requires the most equity. Serviced land with approved development permits may achieve slightly higher leverage. Most land deals are financed by alternative or private lenders. |
| Private / Equity-Based | Up to 80% | 8.50% – 14.00%+ | Private lenders focus on property equity rather than borrower income or credit. Fast approvals for any property type. Higher rates reflect the speed and flexibility of private capital. |
Multi-Family (CMHC Insured)
Max LTV
Up to 85%
Rate Range
3.50% – 5.50%
Highest available LTV through CMHC insurance. Requires 5+ residential units, must meet CMHC underwriting standards. Insurance premium added to loan balance. Up to 40-year amortization.
Multi-Family (Conventional)
Max LTV
Up to 80%
Rate Range
4.50% – 6.50%
Standard institutional financing without CMHC insurance. No insurance premium. Faster processing and fewer restrictions than insured programs.
Office
Max LTV
Up to 80%
Rate Range
4.75% – 7.00%
Rates and leverage depend heavily on tenant quality, lease terms, and occupancy. Single-tenant properties with strong credit tenants may achieve better terms.
Retail
Max LTV
Up to 80%
Rate Range
4.75% – 7.50%
Grocery-anchored and essential service retail command better terms. Strip malls and single-tenant retail depend on lease length and tenant creditworthiness.
Industrial
Max LTV
Up to 80%
Rate Range
4.50% – 6.75%
Currently a favored asset class among institutional lenders. Strong demand for warehouse and logistics space supports aggressive pricing. Owner-occupied properties may qualify for enhanced programs.
Hotels & Hospitality
Max LTV
65% – 70%
Rate Range
5.50% – 9.00%
Operating businesses with revenue volatility command lower LTV. Flagged properties with major brand affiliations receive better terms than independent operators.
Construction
Max LTV
Up to 80%
Rate Range
6.50% – 12.00%
LTV based on completed or as-if-complete appraised value. Actual advance rates on cost are typically 65% to 80%. Draws released based on construction milestones and inspections.
Land (Raw & Serviced)
Max LTV
Up to 70%
Rate Range
7.00% – 14.00%
Raw land requires the most equity. Serviced land with approved development permits may achieve slightly higher leverage. Most land deals are financed by alternative or private lenders.
Private / Equity-Based
Max LTV
Up to 80%
Rate Range
8.50% – 14.00%+
Private lenders focus on property equity rather than borrower income or credit. Fast approvals for any property type. Higher rates reflect the speed and flexibility of private capital.
Factors That Affect Your LTV
Property Condition & Age
Well-maintained buildings with recent capital improvements command higher LTV ratios. Deferred maintenance or aging systems reduce the value lenders are willing to lend against.
Location & Market Strength
Properties in strong urban markets with low vacancy rates qualify for higher leverage than those in secondary or rural markets where resale risk is greater.
Occupancy & Income Stability
Fully leased properties with long-term tenants and stable income histories receive maximum LTV. Higher vacancy or short-term leases reduce available leverage.
Borrower Strength
Experienced borrowers with strong net worth, good credit, and a proven track record can access higher LTV ratios than first-time investors or those with credit challenges.
Frequently Asked Questions
Loan-to-value is the ratio of the mortgage amount to the appraised value of the property, expressed as a percentage. For example, a $3,000,000 mortgage on a property appraised at $4,000,000 represents a 75% LTV. Lenders use LTV to measure their risk exposure - the higher the LTV, the greater the risk to the lender and the less equity the borrower has in the property.
In some cases, yes. CMHC-insured multi-family mortgages allow up to 85% LTV. Subordinate financing such as mezzanine loans or vendor take-back mortgages can effectively increase your total leverage beyond the first mortgage LTV limit. However, total leverage is still capped by lender policies and DSCR requirements.
Absolutely. Lower LTV ratios typically result in better interest rates because the lender has more equity protection. A deal at 50% LTV will almost always price better than the same deal at 75% LTV. Each lender has its own pricing grid based on LTV tiers, and the rate improvement for lower leverage can be significant.
For purchases, lenders use the lower of the purchase price or the appraised value to calculate LTV. For refinances, LTV is based solely on the current appraised value. This distinction matters most when a borrower pays a premium above appraised value or when a property has appreciated significantly since purchase.
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