How much will a lender lend on it?
Bigger properties are underwritten on the building's income. Enter the rents and expenses, and see net operating income, the debt coverage ratio and the loan the income supports next to the loan the value supports.
Rough numbers only. This is a calculator for planning, not an approval or advice. Rates shown are examples you can change. Nothing you type is saved unless you choose to email it to yourself.
- Net operating income / year
- Cap rate
- Max loan by income (DSCR)
- Max loan by value (LTV)
- Which test limits you
- Down payment needed
- Mortgage payment / month
- Debt coverage at this loan
Rough numbers for planning only. This isn't an approval, a quote, an offer or advice. Example rates are for the math and aren't rates we're offering. Your lender's policies, your credit and the property change the real answer.
Three steps.
Enter income and expenses
Gross yearly rent, a vacancy allowance and your operating costs. Leave the mortgage out of expenses.
Set the lender's tests
A target debt coverage ratio and a maximum loan-to-value. The defaults are examples. Every lender and program sets its own.
Read the lower number
Lenders lend the smaller of what the income supports and what the value supports. That gap is your down payment.
Worth knowing.
NOI drives everything
Net operating income is rent after vacancy and operating costs, before the mortgage. On 5+ unit and commercial deals, it decides the loan more than your personal income does.
What DSCR means
The debt service coverage ratio is NOI divided by the yearly mortgage payments. A ratio of 1.20 means the building earns 20% more than it needs to pay the mortgage. CMHC's standard rental program, for example, sets minimums from 1.10 to 1.30 for residential space, depending on the size of the building and the term.
Insured multi-unit options
CMHC insures rental buildings with 5 or more units through its standard rental program and MLI Select. MLI Select can allow higher loan-to-value and longer amortizations in exchange for affordability, energy or accessibility commitments. It's detailed work, so let's look at it together.
How do lenders size a commercial or 5+ unit mortgage?
They test the loan two ways: what the building's income can support at a minimum debt coverage ratio, and a maximum percentage of the value. You get the lower of the two. This calculator runs both tests with the numbers you enter.
What debt coverage ratio do lenders want?
It depends on the lender, the property and the program. As one published example, CMHC's standard rental housing program sets minimums between 1.10 and 1.30 for residential space. Conventional commercial lenders set their own, often higher for mixed-use and commercial space.
Can I use CMHC insurance on a multi-unit building?
For rental buildings with at least 5 units, yes, through CMHC's standard rental program or MLI Select. MLI Select ties higher leverage and longer amortizations to affordability, energy efficiency or accessibility commitments, and has rules on non-residential space.
Why doesn't this match my lender's number?
Lenders adjust rents to market, add their own expense allowances, use their own rate for the coverage test and apply property-specific rules. Treat this as a first pass, then let me run it against real lender criteria.
Want the real number?
These are rough numbers. I can run your actual file against real lender criteria, and checking your options won't touch your credit.
Keep running the numbers
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