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Commercial refinance and equity take-out

See how much equity a refinance could free up at your target loan-to-value, and what the new payment looks like. Then talk to us about your real options.

Your numbers

Sized to a maximum loan-to-value, with Canadian semi-annual compounding.

A rate to estimate with. We will confirm your actual options.
Optional. Add it to apply the income test too.
Equity available to take out
$0
LTV-limited new loan$0
DSCR-limited new loan$0
Maximum new loan (lower of the two)$0
Binding constraint-
Current balance$0
Equity available$0
New monthly payment on the max loan$0
Talk to us

For illustration only and not an offer of financing or a rate quote. The amount you can take out depends on the property's income and value at the time, the existing loan may carry a prepayment cost to break, and all figures are subject to lender review. Estimates use Canadian semi-annual compounding and assume a fixed rate held for the full amortization shown. Speak with us for figures specific to you. TMG HarbourTown Mortgage Inc., Licence #3000145.

What these numbers mean

Plain-language definitions and the typical ranges, so you can play with the inputs with confidence.

Current property value
What the asset is worth today, usually set by a lender-ordered appraisal. The new loan is capped against this value, so a conservative appraisal lowers your take-out.
Typical: lenders order a current appraisal for any commercial refinance
Current loan balance
What you still owe on the existing mortgage. Equity available is the new loan minus this balance, since the old loan is paid off first.
Typical: the existing loan is discharged from the refinance proceeds
Maximum LTV (loan-to-value)
The largest loan a lender will advance against value, as a percentage. On a refinance this cap is usually tighter than on a purchase.
Typical: up to 75 percent on conventional commercial; refinances often capped at 80 percent residential
New rate
The annual rate used to estimate the new payment. It is an estimate to model with, not a quote, and commercial rates move with the lender, term, and asset.
Typical: commercial rates run above comparable residential rates
New amortization
The repayment period the new payment is spread over. A longer amortization lowers the payment and can support a larger income-tested loan.
Typical: 25 years on conventional commercial
Net operating income (NOI) and minimum DSCR
NOI is income after operating costs, before financing. DSCR is NOI divided by annual debt service, and the minimum is the cushion the lender wants. Add NOI to apply the income test alongside the value cap.
Typical: DSCR 1.20 to 1.30 conventional commercial
Binding constraint and prepayment cost
Your real maximum is the lower of the LTV-limited and DSCR-limited loans, whichever binds. Breaking the existing mortgage early can also carry a prepayment charge (often an interest rate differential, the IRD), which is commonly underestimated and can offset the benefit of refinancing.
Typical: IRD or three-months-interest penalties apply to break a fixed term
These are general ranges, not your numbers. The right figure depends on your situation, the property, and the lender. Talk to us and we will pin it down.

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