Mortgage rules for a small mixed-use?

Hi guys,

I am looking at a triplex with a commercial unit on the ground floor (bike shop) and two residential units on the top floor.
As I have never ventured into mixed-use commercial real estate, I am not sure how financing works.

Can I move in one of the top units and pay only 10% down ?
Will the bank consider it a commercial building and require 25-35% down?

I believe the value of the commercial part is about 30% of the property and rent is 33k/year. Does that change anything?

Thank you so much for your input!

No. Unless you are in a treasured area your financing options will be slim. If it is neighbourhood strip centre with C-grade tenants could be 40% down. Commercial usually begins at 30%.

Could be very different with an excellent A-grade tenant. The apartment piece to too small to really think about independently. The property value is driven by the commercial.

Minimum equity for commercial around 30%.

Shop around. Budget 5-6% interest rate with 30-35% down. If you get better terms: take them.


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I would check in with your local banks and credit unions.
Someone familiar with the area might - might - be able to assist at better rates.
If the commercial unit also allows allows for residential occupancy you might find someone who values the property as a residential triplex.

Commercial properties are all unique in terms of financing and really depend on location, condition and financials. Typically for a mixed-use commercial, 30-35% down is what we'd advise clients to expect to put down with 20-25 year amortization. If the property has strong fundamentals, lenders will consider as little as 25% down.

If the commercial component represents less than 25% of the overall revenues, however, then some lenders have programs where they can treat this under a residential lending property where you can do 20-25% down, and 25-30 year amortizations with preferred pricing.