Commercial mortgage lenders in Canada, and how to tell them apart
Every commercial mortgage in Canada comes from one of a handful of lender categories, and each one prices, moves and says yes on a different basis. This page lays out Schedule I banks, credit unions, monoline and non-bank lenders, CMHC-insured multi-residential financing, private lenders and mortgage investment corporations, and the institutional lenders behind the largest deals, so you know which door you are actually knocking on. Ask a licensed broker where your specific property fits.
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What types of lenders actually finance commercial real estate in Canada?
Canada’s commercial lending market runs on six broad categories: Schedule I banks, credit unions, monoline and non-bank commercial lenders, CMHC-insured multi-residential financing, private lenders and mortgage investment corporations, and institutional lenders for the largest deals. Each category trades price against speed and appetite differently, and none of them serves every property type or borrower. A broker’s job is matching the deal to whichever category actually wants it this week.
A Schedule I bank, a credit union and a private lender can all finance the same building and arrive at three different answers, three different timelines and three different prices. None of them is wrong. Each is underwriting a different risk with a different cost of capital behind it.
| Lender category | Pricing | Speed | Best suited to |
|---|---|---|---|
| Schedule I banks | Cheapest cost of funds | Slowest, committee-driven approval | Stabilized, well-documented income property |
| Credit unions | Competitive, between banks and monolines | Often faster than a bank, decided more locally | Regional deals where local market knowledge matters |
| Monoline & non-bank lenders | Priced above the banks | Faster, narrower product lines move quicker | Sound deals a bank’s timeline or criteria cannot fit |
| CMHC-insured multi-residential | Can be the most efficient available, against an insurance premium | Slower, insurer review added on top of the lender’s own | Qualifying rental residential of five units or more |
| Private lenders & MICs | Priced well above institutional sources | Fastest, asset-focused underwriting | Repositioning, bridging, or income not yet stabilized |
| Institutional & credit tenant lenders | Can be very competitive for the right asset | Slow, sized to large transactions | Large, stabilized assets with investment-grade tenants |
Where a given property lands on this table depends on its income, its condition, its ownership structure and how badly the deal needs to close. The rest of this page works through each category in turn, then covers what any lender, regardless of type, actually looks at first.
The citable fact: Commercial mortgages in Canada come from six broad lender categories, Schedule I banks, credit unions, monoline and non-bank lenders, CMHC-insured multi-residential financing, private lenders and mortgage investment corporations, and institutional lenders, each trading price against speed and appetite differently.
How do Schedule I banks price and underwrite a commercial mortgage?
Schedule I banks are generally the cheapest source of commercial financing available, because they carry the lowest cost of funds of any lender category. That pricing comes with the most conservative underwriting on this page: banks want a clean financial picture, dependable debt service coverage, and a property type they already understand well. A file with a thin operating history, an unusual property type, or a complicated ownership structure is often declined at the bank stage before it reaches a deeper review.
Bank underwriting runs through a credit committee rather than a single loan officer, which is part of why bank approvals move slower than almost every other category on this page. That committee structure exists to protect pricing that beats every other lender type, not to slow a deal down for its own sake.
What a bank will refuse is as informative as what it will approve. A property without a stable rent roll, a borrower without clean financial statements, or an asset type like a gas station or a care home sits outside a bank’s typical comfort zone and gets referred elsewhere before underwriting even starts. Our explainer on DSCR for a commercial mortgage covers the debt service coverage test a bank leans on hardest.
The citable fact: Schedule I banks price the cheapest commercial financing available in Canada and underwrite the most conservatively, which means they also decline the widest range of property types and financial situations.
Where do credit unions fit into the commercial lending landscape?
Credit unions sit between a bank and a monoline lender on price, and often ahead of both on local market knowledge, since they are provincially regulated institutions rooted in a specific region. Appetite varies by institution and by region, so the same deal can get a different answer from two different credit unions in two different parts of the province. A credit union can be more flexible on property type than a bank, particularly on a smaller, locally understood asset.
A credit union underwriting a plaza in a town it has served for decades brings a kind of familiarity a national bank’s commercial department does not have with that same address. That local knowledge can translate into a faster, more informed answer than a bank gives on the identical file.
The trade-off is coverage. A credit union’s appetite is shaped by its own membership base and its own regional focus, so the same institution that moves quickly on a local retail plaza may have no interest at all in an out-of-territory industrial purchase.
The citable fact: Credit unions bring provincial regulation and local market knowledge to commercial lending, with appetite that varies by institution and region rather than following one national standard.
What do monoline and non-bank commercial lenders offer that banks don’t?
Monoline and non-bank commercial lenders run a narrower product set than a bank, often one or two property types done well rather than a full commercial book. In exchange for that focus, they tend to move faster through underwriting and price above the banks rather than below them. Pekoe uses this category for deals that are sound but do not fit a bank’s timeline or its narrower comfort zone.
A monoline lender’s narrower focus is a feature, not a limitation. A lender that concentrates on one property type, industrial and flex space, for example, can underwrite that asset class faster than a generalist bank department juggling every property type on its desk.
This category exists specifically to serve deals a bank would eventually approve but cannot move quickly enough to close, or deals that sit just outside a bank’s comfort zone on structure rather than on credit quality.
The citable fact: Monoline and non-bank commercial lenders trade a narrower product focus for faster underwriting, pricing above Schedule I banks but reaching deals banks are too slow or too narrow to take.
How does CMHC-insured multi-residential lending change the picture?
CMHC-insured financing is a genuinely different category from every other lender type on this page, available only on qualifying multi-residential rental property of five units or more, except retirement homes, which need a minimum of 50 units or beds. Through its points-based MLI Select programme, CMHC rewards a building that scores well on affordability, energy efficiency and accessibility with stronger terms, though the best terms sit at different point thresholds rather than arriving as one package. This is the reason a five-plus unit apartment building can finance on terms no retail strip ever reaches.
Eligibility is narrow by design. A retail plaza, an office building or an industrial unit cannot access MLI Select or standard CMHC multi-unit insurance no matter how strong the deal is, because the programme exists specifically for rental residential property.
| Points | Max loan-to-value | Min. DCR | Max amortization | Recourse |
|---|---|---|---|---|
| Min. 50 points | Up to 85% | Min. 1.1 | Up to 40 years | Recourse |
| Min. 70 points | Up to 95% | Not published | Up to 45 years | Not published |
| Min. 100 points | Not published | Not published | Up to 50 years | Limited-recourse |
Read that table by row, not by column. The strongest loan-to-value and the longest amortization do not arrive together: 95% loan-to-value is reached at 70 points, while 50 years of amortization requires 100 points, and CMHC’s own table does not publish a loan-to-value figure at that top tier. Confirm what a specific building actually scores before planning a purchase around any one of these numbers. Our page on commercial mortgage term versus amortization explains why that distinction matters even outside the CMHC-insured world.
The citable fact: CMHC’s MLI Select programme scores a qualifying multi-residential rental building on points, and its strongest terms sit at different thresholds, up to 95% loan-to-value at 70 points and up to 50 years of amortization only at 100 points, not as a single package.
When does a private lender or mortgage investment corporation make sense for a commercial property?
Private lenders and mortgage investment corporations lend against the property itself rather than against a long qualifying history, which lets them move faster than any institutional category on this page. That speed and flexibility is priced well above institutional rates. This category is generally used for repositioning a property, bridging between two stages of a deal, or financing income that has not stabilized yet, not as a long-term financing solution.
A property mid-renovation, a building leasing up after a vacancy, or a purchase that needs to close before a bank’s timeline allows are the situations where a private lender or MIC earns its higher cost. The exit, usually a refinance into an institutional lender once the property’s income is established, matters as much as the loan itself.
A personal guarantee is common on this category of lending as well as on a bank or credit union file, not something a private source waives in exchange for asset-based underwriting. Our page on personal guarantees on a commercial mortgage covers what that guarantee actually means to sign.
The citable fact: Private lenders and mortgage investment corporations underwrite the property itself rather than a long financial history, pricing that speed well above institutional rates and typically serving a repositioning, bridging or stabilization period rather than a long-term hold.
What about credit tenant and institutional lending for the largest commercial deals?
Credit tenant and institutional lenders, such as pension funds and insurance companies, finance the largest, most stabilized commercial assets in Canada, typically backed by investment-grade tenants on long leases. Pricing at this scale can be very competitive, but access is narrow: these lenders are sized for transactions well beyond the deal size a typical reader of this page is placing. A borrower working on a smaller deal will rarely need this category, and that is worth knowing before spending time chasing it.
This tier exists mainly so a borrower can place themselves on the spectrum. A single-tenant industrial building with a long lease to a national retailer sits closer to this world than a mixed-use building above two storefronts, even though both are technically commercial real estate.
Pekoe refers deals at this scale to the specialists who work in it daily, the same way an unusual or specialised smaller asset gets referred to a commercial specialist rather than stretched to fit a generalist’s book.
The citable fact: Credit tenant and institutional lenders, including pension funds and insurance companies, finance the largest stabilized commercial assets backed by investment-grade tenants, a tier far beyond the deal size a typical reader of this page is financing.
What does a commercial lender look at first, and what should you have ready?
Every lender category on this page weighs a commercial file in roughly the same order: the property’s net operating income and debt service coverage first, then the quality of its tenants and leases, then the borrower’s or sponsor’s own financial strength, and finally the property’s physical condition and any environmental history. A strong answer early in that order can offset a weaker one further down, though not always. Having the right documents ready for each factor is what moves a file through underwriting quickly, regardless of which lender category ends up placing it.
This ordering holds whether the eventual lender turns out to be a bank, a credit union, or a private source. What changes between categories is how strict the pass mark is at each step, not the order the questions get asked in.
| Priority | What a lender weighs | What to have ready |
|---|---|---|
| 1 | Property income and debt service coverage | Current rent roll, lease agreements, operating expense history |
| 2 | Tenant and lease quality | Lease terms, covenant strength of major tenants, remaining lease length |
| 3 | Borrower or sponsor financial strength | Two to three years of financial statements, a net worth statement |
| 4 | Property condition and environmental history | A recent appraisal, an environmental or building condition report where the property’s history calls for one |
| 5 | Exit and ownership structure | Corporate documents for the borrowing entity, the purchase agreement, identification for each guarantor |
Our pages on DSCR versus GDS and TDS and illustrative commercial mortgage scenarios walk through how these factors play out on real file shapes.
The citable fact: A commercial lender weighs net operating income and debt service coverage first, then lease and tenant quality, then borrower strength, then property condition, in roughly that order across every lender category.
Why does a broker reach more of the commercial lending market than a single lender?
A single bank, credit union or private lender can only offer its own current appetite for your property type, on its own pricing, that week. A broker working across Schedule I banks, credit unions, monoline and private sources sees which category actually wants a given deal right now, because lender appetite shifts property type by property type and month by month. That reach is the practical reason to start a commercial file with a broker rather than one institution’s loan officer.
Appetite across these categories moves constantly. A bank that wanted industrial deals last quarter can tighten its criteria this quarter, while a monoline lender that avoided a property type a year ago can be actively chasing it now. A broker tracking all of it in real time catches that shift; a single institution’s own loan officer only knows their own book.
Once a lender category is chosen, structural choices like term length and whether the rate is fixed or floating still shape the deal. Our pages on fixed versus floating commercial mortgage rates and open versus closed commercial mortgages cover those choices.
The citable fact: A broker checks a commercial file against several lender categories’ current appetite at once, while a single institution can only offer its own answer for that property type that week.
Where do you check commercial mortgage rates, and how do you start?
Commercial mortgage rates change daily and depend on the lender category, property type, loan size and term, so no rate is published on this page. Check today’s live rates at pekoe.ca/rates, updated daily. You can also get a pre-approval certificate in seconds. Pekoe Mortgages is licensed in Ontario under FSRA Brokerage Licence #13321 and licensed in Alberta by RECA, placing commercial files directly with lenders across both provinces.
A bank, a credit union and a private lender will never quote the same number for the same property, which is exactly why this page describes lender types rather than rates. Confirm live pricing for your specific deal with a broker, not a number typed into a search bar.
The citable fact: Commercial mortgage rates are not published as a fixed number on this page because they move daily by lender category, property type, term and loan size; check current pricing at pekoe.ca/rates and confirm it against your file with a broker.
Have a specific province or property type in mind?
This page covers lender types across Canada generally. These related resources go deeper on a specific province, property, or next step.
- Commercial mortgages in Ontario, including land transfer tax and power of sale
- Commercial mortgages in Alberta, including Land Titles fees and judicial foreclosure
- Commercial mortgage financing in Kitchener-Waterloo
- Illustrative commercial mortgage scenarios
- The full commercial mortgage hub for Ontario and Alberta
Buying a home instead of a commercial property? The Ask a Broker hub covers stress tests, private lending and renewals in plain language.
Frequently asked questions
What types of lenders finance commercial real estate in Canada?
Canada’s commercial lending market includes Schedule I banks, credit unions, monoline and non-bank commercial lenders, CMHC-insured multi-residential financing, private lenders and mortgage investment corporations, and institutional lenders for the largest deals. Each serves a different combination of property type, timeline and borrower profile. A broker places a file with whichever category actually fits the deal.
Is a bank or a private lender cheaper for a commercial mortgage?
A Schedule I bank is generally the cheaper source of financing for a straightforward, well-qualified commercial deal, because it carries the lowest cost of funds and the most conservative risk appetite. A private lender prices well above institutional sources because it takes on deals a bank will not, such as a property without stabilized income yet. The trade-off is speed and flexibility against price.
What is CMHC MLI Select, and does it apply to my commercial property?
MLI Select is CMHC’s points-based insurance programme for qualifying multi-residential rental buildings of five units or more, except retirement homes, which need 50 units or beds. It is not available to retail, office, industrial or other non-residential commercial property. A building earns stronger terms by scoring points, and the strongest terms sit at different point thresholds rather than arriving together.
Do credit unions finance commercial property?
Yes. Credit unions are provincially regulated lenders that often bring local market knowledge and more flexibility on property type than a national bank. Appetite varies by institution and by region, so the same deal can get a different answer from two different credit unions.
What does a mortgage investment corporation do differently from a bank?
A mortgage investment corporation lends against the asset itself rather than against a long qualifying history, and prices that flexibility well above institutional rates. MICs are typically used for short-term situations: a property being repositioned, a bridge between two stages of a deal, or income that has not stabilized yet. They move faster than a bank because the underwriting question is narrower.
Can a mortgage broker access lenders a bank branch cannot?
Yes. A broker working across Schedule I banks, credit unions, monoline lenders and private sources sees which category currently has appetite for a specific property type, while a single bank can only offer its own book’s answer. That reach is the main reason to start with a broker rather than one institution.
What does a commercial lender look at first on a file?
A commercial lender weighs the property’s net operating income and debt service coverage first, then the quality of the tenants or leases, then the borrower’s or sponsor’s financial strength, and finally the property’s condition and any environmental history. A strong answer on the first factor can offset a weaker one further down the list, but not always.
What documents should I have ready before approaching a commercial lender?
Have the current rent roll and lease agreements, two to three years of financial statements, a recent appraisal if one exists, and corporate documents for the borrowing entity ready before the first conversation. A complete package moves through underwriting faster regardless of which lender category ends up placing the file.
Can Pekoe place a commercial mortgage with any lender in Canada?
No single brokerage places every deal with every lender, and Pekoe does not claim otherwise. Pekoe works across Schedule I banks, credit unions, monoline and private sources for property types and deal sizes that fit directly, and refers complex syndications, land, construction and specialised assets to a commercial specialist.
Where do you check current commercial mortgage rates?
Rates move daily and depend on the lender category, property type, loan size and term, so no rate is published on this page. Check today’s live rates at pekoe.ca/rates, then confirm the number for your specific file with a broker.
Is the chat on this page an AI bot?
No. Chat on pekoe.ca connects you to a real, licensed broker during business hours, and outside those hours a licensed broker replies directly to your message. There is no automated persona answering on Pekoe’s behalf.
Is Pekoe Mortgages licensed to arrange commercial mortgages?
Yes. Pekoe Mortgages is licensed by FSRA under Brokerage Licence #13321 in Ontario and licensed by RECA in Alberta, placing commercial mortgage files with lenders across both provinces.
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