ScotiaConnect Commercial Real Estate Lending

CMHC-Insured Mortgages

Canada Mortgage and Housing Corporation insurance allows Scotiabank to offer commercial mortgage financing with lower interest rates and higher advance ratios than conventional lending. CMHC-insured mortgages are available for multi-residential properties (purpose-built rental buildings and retirement homes) and typically advance up to 85% of the appraised value.

The insurance premium is paid by the borrower and can be capitalized into the mortgage, reducing the upfront cash requirement. Amortization periods extend up to 50 years for new construction and 40 years for existing properties, which significantly reduces debt service costs relative to conventional mortgages with 25-year amortizations.

ScotiaConnect handles the entire application, underwriting, and disbursement process. Your RM coordinates with CMHC directly, managing the insurer's due diligence requirements so that you maintain a single point of contact throughout the transaction.

Conventional Commercial Mortgages

For properties that do not qualify for CMHC insurance — owner-occupied commercial buildings, retail plazas, industrial warehouses — Scotiabank offers conventional mortgage financing with advance ratios up to 75% of appraised value. Conventional mortgages carry modestly higher rates than insured products but offer greater flexibility in terms of prepayment provisions and property use restrictions.

The underwriting process evaluates both the property's income-generating capacity (debt service coverage ratio, or DSCR) and the borrower's overall credit profile. A stabilized office building leased to investment-grade tenants on long-term leases will receive more favourable pricing than a speculative development project, reflecting the difference in cash-flow certainty.

Construction Financing

Construction loans through ScotiaConnect are structured as revolving facilities that advance funds in proportion to completed work. Draws are released after a Scotiabank-appointed inspector verifies that the corresponding construction milestone has been achieved and that all subcontractor lien waivers have been collected.

The draw schedule is agreed upon at the outset of the project and typically mirrors the general contractor's progress billing schedule. Interest accrues only on the drawn balance, and the outstanding loan converts to a permanent mortgage (or is refinanced with a CMHC-insured take-out) upon project completion and occupancy.

ScotiaConnect's construction loan dashboard provides real-time visibility into draw requests, inspection reports, remaining availability, and accrued interest. This transparency is particularly valuable for developers managing multiple projects simultaneously.

Bridge Lending

Bridge loans serve a specific purpose: they provide short-term capital to bridge the gap between acquiring a property and securing permanent financing. Typical use cases include purchasing a building before the existing CMHC application is approved, or funding a land acquisition while the zoning approval process is underway.

Bridge facilities through Scotia Connect are priced at a premium to permanent mortgages, reflecting their short tenor (typically 6 to 18 months) and the execution risk inherent in the underlying transaction. However, they enable transactions that would otherwise be impossible to close on the seller's timeline, making them an essential tool in any developer's capital structure toolkit.