Commercial Mortgage RefinanceCapital Restructured with Precision
Strategic refinancing solutions for commercial properties $2M+ — optimizing structure, cash flow, and long-term positioning across Canada.
Commercial Mortgage Refinancing in Canada
Commercial mortgage refinancing is the process of replacing an existing commercial loan with new financing, typically to achieve better terms, access equity, or restructure debt obligations. For owners of income-producing properties across Canada, strategic refinancing represents one of the most powerful tools for optimizing portfolio performance and unlocking capital for growth.
Unlike residential mortgage renewals, commercial refinancing involves comprehensive underwriting that evaluates property performance, sponsor strength, and market conditions. Lenders assess Net Operating Income (NOI), Debt Service Coverage Ratio (DSCR), and Loan-to-Value (LTV) to determine eligibility and pricing. This creates opportunities for well-positioned borrowers to negotiate meaningfully better terms than simple renewals.
The Canadian commercial refinancing landscape includes institutional lenders (Schedule A banks, credit unions, life insurance companies), alternative lenders (Mortgage Investment Corporations, private debt funds), and government-insured programs through CMHC for multi-unit residential properties. Each channel offers distinct advantages depending on your property type, timeline, and objectives.
Why Commercial Refinancing Differs from Residential
Residential mortgages are underwritten primarily on borrower income and credit. Commercial mortgages are underwritten on property cash flow—making refinancing outcomes highly dependent on operational performance, tenant quality, and market positioning.
Whether you are approaching maturity, seeking to optimize rates, accessing equity for reinvestment, or transitioning from private to institutional financing, refinancing decisions benefit from strategic broker guidance. At Mortgage Forces, we structure refinancing solutions that align with both immediate needs and long-term portfolio strategy.
When Commercial Refinancing Makes Sense
Strategic refinancing is driven by specific triggers and opportunities. Here are the most common scenarios where refinancing delivers meaningful value.
Maturity Approaching
Proactively secure optimal terms before your current mortgage matures, avoiding rushed renewals and unfavourable conditions.
Improve Cash Flow
Restructure amortization or negotiate better rates to enhance monthly cash flow and strengthen your DSCR position.
Access Equity
Unlock built-up equity for acquisitions, capital improvements, portfolio expansion, or other strategic investments.
Rate Optimization
Take advantage of improved market conditions or enhanced property performance to secure more competitive rates.
Consolidate Portfolio
Combine multiple property loans into a streamlined financing structure with simplified administration and reporting.
Transition Lenders
Move from private or alternative financing to institutional lenders as your property stabilizes and qualifies.
Types of Commercial Refinance Structures
Different refinancing structures serve different strategic objectives. Understanding your options is essential to optimizing outcomes.
Conventional Institutional
Traditional refinancing through Schedule A banks, credit unions, and life insurance companies for stabilized, income-producing properties.
- Competitive long-term rates
- Up to 75% LTV typical
- 5-10 year terms available
- Requires strong DSCR (1.20x+)
Alternative Lender
Flexible refinancing options from MICs, private debt funds, and specialty lenders for properties that need creative structuring.
- Flexible underwriting
- Higher LTV potential
- Faster approvals
- Interest-only options
Bridge-to-Permanent
Short-term refinancing that positions your property for permanent institutional financing once stabilization targets are achieved.
- 12-24 month terms
- Value-add repositioning
- Lease-up financing
- Exit to institutional
CMHC Multi-Unit
Government-insured refinancing for multi-family residential properties (5+ units) offering premium terms and extended amortization.
- Up to 85% LTV
- 40-50 year amortization
- Rate discounts available
- MLI Select eligible
Underwriting Factors Lenders Assess
Understanding what lenders evaluate helps you position your refinance application for optimal terms.
Loan-to-Value (LTV)
The ratio of your requested loan amount to the property's appraised value. Lower LTV typically means better rates and terms.
Institutional: 65-75% | Alternative: Up to 80%
Debt Service Coverage (DSCR)
Net Operating Income divided by annual debt service. Demonstrates the property's ability to service its debt obligations.
Minimum 1.20x institutional | 1.10x alternative
Net Operating Income (NOI)
Gross income minus operating expenses. The foundation for commercial property valuation and loan sizing.
Trailing 12-month actuals preferred
Tenant Quality & Lease Terms
Creditworthiness of tenants, lease duration, and rent roll stability significantly impact refinance terms.
National tenants | Long-term leases favoured
Property Type & Condition
Asset class, age, condition, and capital requirements influence lender appetite and pricing.
Class A/B preferred | Recent upgrades beneficial
Sponsor Experience
Your track record in commercial real estate ownership and management affects approval and terms.
Portfolio size | Management history
CMHC & Multi-Unit Refinancing Programs
For multi-unit residential properties with five or more units, CMHC mortgage insurance can be applied to refinancing transactions, offering significant advantages over conventional commercial financing.
CMHC-insured refinancing enables higher loan-to-value ratios (up to 85%), extended amortization periods (up to 50 years), and preferential interest rates due to the government guarantee reducing lender risk.
The MLI Select program offers additional premium reductions and rate discounts for properties meeting social outcome criteria in affordability, accessibility, or energy efficiency—making it particularly attractive for refinancing existing multi-family assets.
85%
Maximum LTV Available
50yr
Extended Amortization
95bps
Potential Rate Savings
5+
Units Minimum
Equity Take-Out & Recapitalization
One of the most powerful applications of commercial refinancing is accessing equity built up in your property through appreciation and mortgage paydown. Equity take-out allows you to unlock capital without selling—maintaining ownership and cash flow while funding new opportunities.
Common uses for commercial equity take-out include acquiring additional properties, funding capital improvements or repositioning, paying down higher-cost debt, or providing liquidity for other business or personal needs.
Recapitalization strategies can also involve restructuring the debt and equity stack across a portfolio, optimizing leverage, and positioning assets for long-term growth while managing risk appropriately.
Portfolio Expansion
Use equity to fund down payments on new acquisitions
Capital Improvements
Fund renovations that increase NOI and property value
Debt Optimization
Pay off higher-rate loans or consolidate obligations
Why Use a Commercial Mortgage Agent for Refinancing
The difference between a simple bank renewal and agent-led refinancing can be significant — in both terms and total cost.
| Factor | Bank Renewal | Broker-Led Refinance |
|---|---|---|
| Lender Access | Single lender options | 30+ institutional & alternative lenders |
| Rate Negotiation | Posted rates with limited flexibility | Competitive bidding across lenders |
| Structure Flexibility | Standard products only | Custom structuring options |
| Market Intelligence | Single lender perspective | Full market visibility |
| Advocacy | Bank represents own interests | Broker represents your interests |
| CMHC Programs | May not offer or prioritize | Proactive program optimization |
Dianna Grigoras at Mortgage Forces acts as your strategic advisor, not a salesperson—ensuring your refinancing is structured to meet your specific objectives with access to the full spectrum of Canadian lenders.
Book a CallRefinancing Case Structures
Anonymized examples illustrating common refinancing scenarios and strategic approaches.
Multi-Unit Residential Refinance
24-unit apartment building, Ontario
Situation
Existing 5-year term maturing with private lender at 8.5%. Property fully stabilized with improved NOI.
Approach
Positioned for CMHC MLI Select qualification with energy efficiency upgrades. Secured 40-year amortization.
Outcome
Transitioned to institutional financing with significantly improved cash flow position.
Industrial Property Equity Access
45,000 SF distribution facility, Alberta
Situation
Long-term triple-net tenant in place. Owner sought capital for portfolio expansion without selling.
Approach
Structured conventional refinance at 70% LTV with equity take-out. Maintained favourable DSCR.
Outcome
Released capital for acquisition of adjacent development land.
Mixed-Use Restructuring
Retail/residential building, British Columbia
Situation
Multiple loans with different maturities creating administrative burden and cash flow pressure.
Approach
Consolidated debt into single facility with extended amortization. Negotiated improved terms based on portfolio strength.
Outcome
Simplified structure with improved monthly cash flow and single renewal date.
Frequently Asked Questions
Common questions about commercial mortgage refinancing in Canada.
Restructure Your Commercial Financing with Confidence
Whether you are approaching maturity, seeking to optimize terms, or accessing equity for growth, strategic refinancing starts with expert guidance.
Information is for general purposes only and does not constitute financial advice. Financing is subject to lender approval and underwriting criteria. Mortgage Forces | Dianna Grigoras | License: M25000501