Commercial DSCR
Commercial DSCR + cap-rate calculator.
Commercial lenders qualify primarily on Debt Service Coverage Ratio (DSCR). Most want ≥ 1.20-1.30. Below 1.10 = decline; above 1.40 = best pricing.
Live math · no calculate button| Canadian semi-annual compounding · OSFI B-20| Ontario + Toronto LTT-aware| Same engine our advisors use
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DSCR
1.31
Strong — typical lender approval
Loan amount$1,680,000
Monthly debt service$10,699
Annual debt service$128,386
Annual cashflow$39,614
Cap rate7.00%
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Methodology · Canadian-correct
Lender appetites vary by asset class. CMHC MLI Select multi-family can offer higher leverage with affordability/energy/accessibility concessions. Sponsor strength can offset DSCR weakness on owner-occupied files.
Mortgage glossary— terms that matter for this calculator
What is DSCR and how is it calculated?
Debt Service Coverage Ratio = <code>Net Operating Income ÷ Annual Mortgage Payment</code>. NOI = gross rent − operating expenses (excluding the mortgage). DSCR of 1.25 means the property generates 25% more cashflow than the mortgage payment. Most commercial lenders want minimum 1.20-1.30.
What's a good cap rate for Canadian commercial property?
Depends on asset class + market. <strong>Multifamily (5+ unit) in GTA</strong>: 4.5-5.5%. <strong>Retail strip</strong>: 5.5-7%. <strong>Industrial</strong>: 5-6.5%. <strong>Hospitality</strong>: 7-10% but higher risk. Higher cap rate = more cashflow per dollar invested but typically signals more risk.
How is commercial different from residential lending?
Commercial qualifies on the property's cashflow (DSCR), not your personal income. Typical max LTV: 65-75% (vs 80% residential). Amortization: 20-25 years standard, or up to 50 years on CMHC MLI Select multifamily. Rates: 4.50-7.00% depending on asset class and LTV.
What is CMHC MLI Select?
CMHC's multifamily insurance product for 5+ unit residential. Stack energy + affordability + accessibility points to unlock up to <strong>95% LTV + 50-year amortization</strong>. Rates 100-150 bps below uninsured commercial. Game-changer for serious multifamily investors. See <a href="/cmhc-multiplex-mortgage">CMHC multiplex</a>.
Do commercial mortgages have prepayment penalties?
Yes — typically larger and stricter than residential. Most commercial mortgages have full-term lock with significant penalties for breakage. Open commercial mortgages exist but at materially higher rates. Plan the term carefully — commercial isn't where you want to break early.