Commercial and construction financing reads the market differently than a home mortgage. A few benchmarks and one key ratio do most of the work. Here is what to watch.
On commercial and income property, lenders start with whether the asset can service the debt. That is the Debt Service Coverage Ratio, or DSCR: the property's net operating income measured against the loan payments. Strong, well-documented income gives a deal room; thin coverage tightens it. Before rate, this is the number that shapes what is possible.
Keep in mind these are benchmarks, not lending rates. Lenders quote as a spread over a benchmark, so your all-in rate is the benchmark plus that spread. On CMHC-insured multi-unit deals that spread is usually set over the Canada Mortgage Bond, and because the CMB itself prices at a spread over Government of Canada bonds, your rate ultimately tracks both, with some lenders quoting directly off the GoC. The spread reflects the asset, its income and condition, leverage, the term, and the borrower, which is why two deals priced on the same day can land at very different rates.
A build is financed in stages and is usually repaid by a take-out mortgage or a sale at completion, not by converting in place. Because the money flows over a timeline, the floating benchmark and your draw schedule both matter to the cost.
A lot of multi-unit financing runs through CMHC-insured programs, and MLI Select has been a popular route. It scores a project across three categories, affordability, energy efficiency, and accessibility, and the more points a project earns, the larger the insurance premium discount and the longer the amortization it can reach, up to 50 years at the top tier. Longer amortization lowers the annual payment, which can be the difference in whether a build's cash flow works.
Worth knowing: the program has been tightening. CMHC restructured its premium pricing in 2025, and as of September 30, 2026 the energy-efficiency scoring moves to the tougher 2020 national building and energy codes. The same design earns fewer energy points under the new baseline, which makes the top tier, and its longest amortization, harder to reach. Insured financing also carries a mortgage insurance premium, usually added to the loan rather than paid up front.
Conventional financing is the other route. It avoids that insurance premium, which can lower the all-in cost, though it typically comes at lower leverage and on the lender's own terms. On many deals it is the better fit. And on some new builds, conventional amortizations can extend to 35 or 40 years by exception, which eases cash flow while a project finds its footing.
Neither route is automatically right. The point of working with a broker who can reach all of them, insured, conventional, and private, is to weigh the trade-offs against your specific deal and help you decide which fits. For timing gaps or files that do not sit cleanly with conventional or insured lenders, private lending is one option to review, not a default, and we frame it as part of a path with an exit in mind.
Going deeper on the insured side? Our CMHC multifamily NOI estimator and program guide walks through MLI Select, the points tiers, and how an apartment deal gets sized, and we are glad to review your numbers and program fit directly.
Bring us the asset and the plan, and we will map the structure and the options across our lender network. A licensed member of our team will follow up.
Start a conversationInformation here is general and educational. It is not financial, legal, or lending advice, and it is not an offer of financing. We are mortgage brokers. Private lending is one option to review, not a recommendation. Any rates or benchmarks referenced are for illustrative purposes only and are subject to change without notice. All financing is subject to lender review, property review, and supporting documentation.