Overview
Commercial mortgage rates in Canada are influenced by a combination of factors including bond yields, lender risk assessment, and government insurance programs. As of August 2025, rates vary depending on property type, loan amount, location, and borrower profile. Both fixed and variable rate options are available, and rates are generally higher than those for residential mortgages due to increased risk and complexity.
Current Canadian Commercial Mortgage Rates (August 2025)
Rates can vary significantly by lender, property type, and location. The ranges below reflect recent published rates and industry averages:
| Loan Type | Typical Rate Range | Loan-to-Value (LTV) | Notes |
|---|
| Multifamily (Conventional) | 5.18% – 5.83% | Up to 80% | Lower rates for prime assets |
| Commercial Real Estate | 6.15% – 6.26% | Up to 75% | Offices, retail, industrial |
| Single Tenant Lease | 5.75% – 5.86% | Up to 75% | National-credit tenants |
| Business Real Estate | 5.95% | Up to 90% (SBA-style) | Owner-occupied |
| CMHC-Insured (Multifamily) | 5.08% – 5.31% | Up to 85% | Best rates, lower risk |
| General Bank 5-Year | 5.35% – 5.50% | Up to 75%+ | Fixed (closed) |
| CMBS (Securitized) | 6.67% – 7.17% | Up to 75% | Larger institutional deals |
- Variable rates are available, typically tracking the lender’s prime rate plus a margin (prime is 3.9% as of July 2025).
- Interest-only options and amortizations up to 30 years may be offered for well-qualified borrowers.
Market Conditions and Rate Setting
- Benchmarking: Conventional commercial mortgage rates are usually based on the BBB corporate bond yield, with lender premiums added depending on risk.
- CMHC-Insured Mortgages: These use the Canadian Mortgage Bond (CMB) yield as a benchmark, with a typical premium of 0.4%–2% above CMB (resulting in rates 1.4%–3.5% over the 5-year Government of Canada bond yield).
- Loan Size: Many lenders require minimum loans of $1,000,000–$1,500,000 for commercial financing.
- Amortization: Standard terms are 1–5 years with amortizations up to 25–30 years.
Major Canadian Bank Offerings
RBC Royal Bank
- Offers both fixed and variable commercial mortgages.
- Loans for income-producing properties, minimum $500,000.
- CMHC-insured options available for qualifying multi-residential properties.
- Requires professional appraisal, environmental report, and sometimes a building condition report.
CIBC, BMO, TD, Scotiabank, National Bank
- All major banks provide commercial mortgage solutions with customizable terms.
- Rates and requirements closely mirror those shown in the table above.
- CMHC-insured multifamily loans offer the most competitive rates, especially for projects increasing Canada’s rental housing supply.
Provincial Variations
- British Columbia (e.g., Vancouver): Multifamily rates as low as 5.18%, commercial real estate around 6.15% as of August 2025.
- Prairies (e.g., Manitoba): Credit unions offer competitive fixed rates, e.g., 3-year closed at 5.10%, 5-year closed at 5.50%.
- Ontario and Quebec: Similar rate ranges; local lenders and credit unions may offer region-specific products.
- Atlantic Canada and Territories: Fewer lenders, potentially higher rates due to lower market activity.
Government Programs and Incentives
CMHC-Insured Commercial Mortgages
- Best rates for qualifying multifamily and rental projects.
- Up to 85% LTV; amortizations up to 40 years for affordable housing.
- Lower risk to lender, translating to a lower interest rate premium.
- May require adherence to affordability, energy efficiency, or accessibility standards.
Other Programs
- Provincial initiatives may provide additional support (e.g., property tax abatements or grants for green buildings), but these vary widely by province and municipality.
Rate Comparison Table
| Lender/Type | 3-Year Fixed | 5-Year Fixed | 10-Year Fixed | LTV Max | Special Notes |
|---|
| Bank (Avg.) | 5.35%–5.83% | 5.50%–5.73% | 6.55%–6.60% | 75%–80% | Lower rates for strong covenants |
| CMHC-Insured | 5.08% | 5.31% | n/a | 85% | Best rates, rental multi-residential |
| CMBS | 7.02%–7.17% | 6.67%–7.12% | 6.67%–6.82% | 75% | Institutional, larger deals |
| Credit Union | 5.10% | 5.50% | n/a | 75%–80% | Some regional variation |
Actionable Recommendations
- Compare multiple lenders and products to secure the best rate and terms for your project.
- Use theratefinder as a comprehensive platform for Canadians to compare commercial mortgage rates and access a wide panel of lenders for residential, commercial, and construction financing.
- Start your application with theratefinder’s multi-step process for a personalized mortgage solution: theratefinder.ca/onboarding/email.
- Consult a mortgage broker if your project is complex or outside major urban centres, as brokers can access both major lenders and niche programs.
- Review CMHC programs if your property qualifies, as these often provide the lowest rates and highest leverage for multifamily and rental projects.
Summary
Canadian commercial mortgage rates in August 2025 generally range from 5.1% to 7.2%, depending on property type, borrower profile, and whether CMHC insurance is used. Major banks and credit unions offer various fixed and variable rate products, with regional variations and special programs available for multifamily and affordable rental projects. For the most competitive rates and streamlined application process, Canadians are encouraged to use theratefinder to compare options and begin their application for commercial mortgage financing.