Case Study: CMHC MLI Select vs Standard Financing for a 5-Unit Rental Property
- Seventy Seven Park
- Aug 28
- 2 min read
When you are investing in a rental property, the way you finance it can make or break your returns. Most buyers are familiar with standard commercial financing, where higher rates and shorter amortization periods often squeeze cash flow.
What many investors do not realize is that CMHC offers a specialized program called MLI Select. This program is designed to encourage affordability, accessibility, and energy efficiency in rental housing. In exchange, CMHC rewards qualifying properties with lower interest rates, longer amortizations, and in some cases, higher loan-to-value ratios.
The result is a financing structure that can dramatically improve monthly and annual cash flow while also opening up access to additional capital.
To see how much of a difference this program makes, let’s look at a real-world comparison.
Rental Property Financing Comparison
Scenario | Loan-to-Value | Amortization | Interest Rate | Monthly Payment | Rental Income | Monthly Expenses | Cash Flow After Expenses |
Standard Financing | 75% ($2,250,000) | 25 years | 5.25% | $13,408 | $13,174 | $400 | - $634 |
CMHC MLI Select | 75% ($2,250,000) | 50 years | 3.79% | $8,324 | $13,408 | $400 | + $4,683 |
Key Takeaways from the Case Study
Standard Rental Property Financing
Loan-to-Value (LTV): The ratio of the loan amount to property value. At 75%, you borrow $2.25M on a $3M purchase.
Amortization: 25 years, which means the loan is paid off faster but requires higher monthly payments.
Interest Rate: 5.25%, which is competitive but pushes payments above rental income.
Cash Flow: Negative $634 per month after expenses.
CMHC MLI Select Financing
Loan-to-Value (LTV): Same 75% baseline, with potential refinancing up to 95% if the property qualifies.
Amortization: 50 years, spreading payments out to reduce monthly obligations.
Interest Rate: 3.79% with insurance incentives and a 10-year term.
Cash Flow: Positive $4,683 per month after expenses, a swing of more than $4,000 compared to standard financing.
Why CMHC MLI Select Matters
Monthly difference: $4,049 in additional earnings.
Annual difference: Nearly $49,000 in net income.
Additional capital: Access to up to $600,000 more through refinancing.
Not every property qualifies. MLI Select requires that the building meet affordability, accessibility, or energy-efficiency criteria. For those that do, the benefits are clear: longer terms, lower interest rates, and stronger cash flow.
cmhc-mli-select-rental-property
This case study shows how financing structure can completely change the financial picture of the same rental property. Many banks do not highlight CMHC MLI Select, and some brokers overlook it.
Contact Eduardo Pontes at Seventy Seven Park to learn more and to see how your property could qualify.
Eduardo Pontes
Managing Director, Principal Mortgage Broker & Real Estate Agent
Mortgage Broker #M09002730
416.455.3800
epontes@seventysevenpark.ca CMHC MLI Select Rental Property
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