Thinking about buying a building with both a business and a place to live? Whether it’s a storefront with an apartment above or a work-live space that suits your lifestyle, a mixed-use property can offer both personal comfort and income potential. But when it comes to financing, it’s not quite as simple as a traditional residential mortgage.
Here’s what you need to know about mixed-use property mortgages in Canada, including how they work, what lenders are looking for, and how to prepare before you apply.
What Is a Mixed-Use Property?
A mixed-use property blends residential and commercial space within the same building or on the same piece of land. These are common in small-town main streets and urban neighbourhoods, where you might see:
- A retail shop or office on the main floor with an apartment above
- A home with a studio, workshop, or clinic attached
- Multi-storey buildings with several residential units and a ground-floor business
Mixed-use properties are popular with entrepreneurs, investors, and anyone looking to combine where they live and work.
Can You Get a Mortgage on a Mixed-Use Property?
Yes—but financing is more complex than for a fully residential property.
Lenders assess:
- The percentage of the building that is residential vs commercial
- The type of business operating in the commercial space
- Your personal income and, in some cases, rental or business income
- Your down payment and credit profile
Some lenders consider a property “residential” if at least 50% of the total square footage is residential. Others are stricter. The more commercial space involved, the more likely you’ll need a commercial mortgage.
Residential vs Commercial Lending Criteria
Here’s a general breakdown:
| Scenario | Possible Mortgage Type |
|---|---|
| Owner lives in one unit, retail shop below | Mixed-use residential mortgage |
| Multi-unit building with some business space | Hybrid or commercial mortgage |
| Primarily commercial with minor residential | Commercial mortgage |
The type of mortgage affects:
- Your down payment (as low as 20% for residential, often 25–35% for commercial)
- The interest rate and term
- Required documentation
- Approval process and lender options
What Are the Down Payment Rules?
- If the residential portion dominates and you’re occupying one unit, you may be eligible for a down payment as low as 20%.
- If the commercial portion is larger or you won’t live there, you’ll likely need 25% or more down and a full commercial mortgage.
Note: Mixed-use properties don’t qualify for CMHC insurance, so you must have at least 20% down.
Documents You’ll Need
Be prepared to provide:
- Detailed floor plans or appraisals showing use of space
- Proof of zoning and permitted use
- Business income statements (if applicable)
- Residential lease agreements (if any units are rented out)
- Personal financials and credit history
Lenders want to see that the building is legally zoned for mixed-use and that you can comfortably afford the mortgage.
Is Rental Income from the Property Counted?
Yes—in many cases, rental income from residential units can help with mortgage qualification. Some lenders also consider income from the commercial space, depending on the tenant and lease terms.
Our Mortgage Affordability Calculator can help you estimate your borrowing power, including how income from tenants may improve your approval chances.
Is a Mixed-Use Property Right for You?
Pros:
- Combine business and personal use
- Generate rental income
- Often located in high-visibility, desirable areas
- More affordable than buying separate commercial and residential properties
Cons:
- Stricter lender requirements
- May require larger down payment
- Zoning and insurance considerations
- Harder to resell than purely residential homes
The Local Broker Can Help You Navigate the Options
Mixed-use mortgages fall into a grey area—and not every bank or lender offers them. At The Local Broker, we specialize in working through the nuances, whether the property leans residential, commercial, or truly blended.
We’ll help you:
- Identify lenders who work with your property type
- Understand your down payment and income requirements
- Compare rates across residential and commercial offerings
- Decide if a mixed-use mortgage or a refinance is right for your goals
Make the Most of Your Space—Apply Today
Ready to explore mortgage options for a mixed-use property? We make the process simple, straightforward, and personalized to your goals.
Start your application now at
👉 https://thelocalbroker.ca/local-broker-mortgage-application/
Let’s help you get the keys to the space that works for how you live—and work.
