What are the lowest commercial mortgage rates?

[MarkTorgerson]

I'm looking for some information on the best commercial mortgage rates investors are paying.

I have a 12 suite apartment in Medicine Hat. Approx 65% LTV. Current rate of prime plus 1.25% or 4.25%.

Considering making a change if I don't get hammered on with fees... or at very least using as leverage for negotiations with my bank.

What are some of the best rates out there? ...and with which institution?



Thanks in advance,

 

[Thomas Beyer]

The top 3 lenders in multi-family are Peoplestrust and First National .. then TD for larger mortgages say over $2M.



CMHC rates are around 2.5% and non-CMHC around 3% for 5 years.



Assuming your asset is in decent shape with no major deferred items, I'd start with Peoplestrust (Dennis Aitken) or First National (Troy Barker) and ask about a CMHC mortgage at max. LTV.



Say "hi" to both as I worked with both for years.



CMHC's "V" is lower than a real world "V" so be prepared to pay CMHC fees that may not make sense, say 2.5% to 4% for 5 years to save 0.5% per year.



I used to be a big fan of CMHC mortgages, as you could get higher LTV's and lower rates, but not anymore - it is a wash today at best.

 

[MarkTorgerson]

Thanks Thomas,



Any idea what type of up front fees I should be looking for on a new commercial loan?

A lower interest rate would make sense but only if the savings supercede the banking fees.

 

[Thomas Beyer]

0.5 to 2% fees .. less if bigger $s .. for $1M about 1%

 

[chrisnorris1]

Thomas had some valid points. We should actually look forward to it.

 

[margaretcowan]

Last year on an 11 suite building in Edmonton at People's Trust I got a one year interest only mortgage at a 65% LTV at prime + 1.5% since rent rolls were not stable. I paid them .5% placement fee and the mortgage broker 1%.



Now rent roll looks good. Dealing directly with Peoples' Trust to get a CMHC mortgage, they've offered 2.5% for a 25 year amortization and 2.75% for a 30 year amortization. No other fees except the usual CMHC fees, environmental report update etc.



I talked with First National too. They offered similar rates but have a $5000 placement fee or in this case, about .64% . Not sure about their other fees since I bowed out.



Hope this helps,

Margaret



Mama Margaret & Friends Cooking Adventures In Italy

www.italycookingschools.com

 

[MarkTorgerson]

Thanks for the input.



I have been dealing with First National on the potential new financing. They are offering similar rates as stated above.

I went back to my bank and they didn't believe me when I told them what was being offered. They called and verified themselves. I now need to strategize when the spread in the interest rates would supercede the fees involved. Basically how long I plan on holding onto this building.



At very least, this information is getting me a .15% decrease in my current rate. Thanks for the contact Thomas, I owe you lunch!