Who this is for
- First-time investors buying a condo or house to rent
- Owners adding a legal secondary suite
- Investors buying duplexes, triplexes and small multi-unit properties
- Parents buying near UW, Laurier or the University of Guelph
Down payment
Non-owner-occupied rentals generally need at least 20% down. Owner-occupied two-to-four unit properties can qualify with less, as the owner lives in one unit.
How rental income is counted
Lenders use either an add-back method (adding 50% to 100% of rent to income) or an offset method (subtracting rent from property costs). The method can make a big difference to how many properties you can carry.
Multi-unit properties
Five or more units fall under commercial lending, including CMHC MLI Select for qualifying multi-unit residential properties, which can allow higher loan-to-value and longer amortizations.
Planning a portfolio
The order you buy in, which lender holds each mortgage, and whether you hold property personally or in a company all affect your ability to keep growing. We plan two or three moves ahead.
Worked example (example only, OAC)
- Purchase price: $700,000 duplex in Waterloo
- Down payment 20%: $140,000; mortgage $560,000
- Sample rate 4.59%, 30 years (uninsured): about $2,860/month
- Rent: $2,100 + $1,700 = $3,800/month; lender counts 80% = $3,040
- Example only, OAC. Excludes taxes, insurance and maintenance.
Frequently asked questions
Can I use my home equity for a rental down payment?
Yes, through a refinance or HELOC, provided you qualify for the combined payments.
Are student rentals harder to finance?
Some lenders limit the number of bedrooms or require licensing. We match you with lenders familiar with student rentals.
Should I buy in my own name or a corporation?
Personal ownership usually gets better rates. Corporate ownership has tax and liability considerations; speak with your accountant.
What about the rental income tax?
Rental income is taxable. Mortgage interest on rentals may be deductible. Get advice from a tax professional.
Do you charge a fee?
Most standard mortgages with good credit cost you nothing; the lender pays the broker. Private and some alternative mortgages carry a broker fee that is disclosed in writing before you commit.
Serving these cities
Related guides
More guides coming soon
Learn more from CMHC and the Financial Consumer Agency of Canada.
Straight answers, no cost and no obligation for most standard mortgages.
Mortgage Kraft · Affinity Mortgage Solutions Inc., Brokerage #13093 · Jay Shah, Licensed Mortgage Broker, Lic. #M22002236 · Rates and examples OAC, subject to change. Not financial advice.