Commercial Mortgage Down Payments in Canada: How Much Do You Really Need?
"How much do I need to put down?" is the first question almost every commercial buyer asks — and the honest answer is it depends on the property's income as much as its price. Here's what actually drives the number.
General information from the Indi Mortgage Commercial Division team — not financial advice.
In short: conventional commercial financing typically needs 25–35% down (a 65–75% loan-to-value), but the figure is driven by the property's income (DSCR) as much as its price — and CMHC-insured multi-unit financing can require materially less.
The short answer
For conventional commercial financing, plan on 25–35% down as a starting point. That maps to a loan-to-value (LTV) of roughly 65–75%. But — and this matters — the down payment is often set by the property's income, not just its price.
Why income can raise your down payment
Lenders size a commercial loan on two tests and take the smaller result:
- LTV — a percentage of value (e.g., 75%).
- DSCR — the loan the property's income can actually service at a safe coverage ratio. → How DSCR works
If a property's income is thin relative to its price, the DSCR test can produce a smaller loan than the LTV test — which means a larger down payment than the "25% rule" suggests. Run your specific deal through the feasibility calculator to see which test governs.
What moves the number
- Property type — stabilized multifamily generally needs less down than special-purpose or higher-risk assets.
- Program — CMHC-insured multi-unit (MLI Select) can allow higher leverage, meaning less down, in exchange for meeting program criteria. → CMHC MLI Select explained
- Income strength — better DSCR supports a bigger loan and a smaller down payment.
- Your covenant and experience — stronger borrowers get more flexibility.
Don't forget closing costs
Beyond the down payment, budget for appraisal, environmental, legal, and lender fees, plus (on CMHC deals) the insurance premium, which is typically added to the loan. A realistic all-in cash-to-close figure is part of any good deal model.
Find your real number
The "25%" rule of thumb is a starting point, not an answer. The real down payment falls out of the property's income, the program, and the lender — which is exactly what we model with you before you write an offer.
- Estimate it now: commercial mortgage feasibility calculator
- Get exact numbers for your deal: (902) 298-0218
- Related: The complete guide to commercial mortgages in Nova Scotia
Sources
- CMHC — Multi-unit mortgage loan insurance — how insured financing changes required equity
Indi Mortgage Commercial Division — commercial mortgages across Halifax and Nova Scotia. General information only; not financial advice.