For a conventional mortgage, the maximum financing available is 75%. There are usually minimum loan amounts with many lenders, and they will lend in major and secondary urban centers in Canada. All mortgage terms available and interest rates are higher than the above program. Maximum amortization is 30 years. Qualification is based on a minimum Debt Coverage Ratio of 1.20, and an Appraisal, and Phase 1 Environmental and/or Building Conditions Report are required. Personal Guarantees are required if property registered under a holding company, and there are lender’s fees up to 1%, plus for the above appraisal and report(s), plus legal fees and disbursements.
If CMHC Insured, maximum financing available is 85%. Insurance premiums range from 1.75% – 4.50%, depending on down payment, and allowed to be added to the mortgage. All mortgage terms available, and interest rates are often much better than the best residential rates. Quite often, the lower interest rates offered will offset the cost of CMHC insurance premiums. Amortizations available between 25-35 years. Minimum Debt Coverage Ratio required is from 1.10 for 5-6 units, and 1.30 for 7+ units. For 5-6 units, an appraisal is required, and for properties with 7+ units a Phase 1 Environment report is required too. CMHC charges $150/unit for the application fee (up to 100 units), and the lender charges up to 1% lender’s fee.
For any questions or specifics about the above programs or property you have in mind to purchase (or refinance), please contact one of our mortgage professionals.