0%
Grow your portfolio or buy a vacation property. We know the rental income rules, down payment requirements, and lender appetite for investment mortgages.
Whether it is your second door or your tenth, investment financing lives or dies on how the lender treats rent. We place the file where the rental math works in your favour.
A rental property you do not live in requires at least 20% down, and there is no default insurance available on it. A second home you occupy part of the year can sometimes be financed with less, because lenders treat it as owner-occupied rather than as an investment.
A property with up to four units where you live in one unit is still owner-occupied in most lender guidelines, which is why a legal duplex or triplex is often the cheapest way into landlording. Five units and up moves the file into commercial lending entirely.
This is where deals are won or lost. Some lenders add a percentage of the gross rent to your income. Others subtract the property's costs from the rent and add only the surplus. A third group uses a debt coverage ratio and largely ignores your personal income.
The same borrower, same property and same rent can qualify at one lender and fail at another purely because of which method is used. Leases, a rental appraisal with market rent estimates, and two years of T776 rental statements all strengthen the case.
Most major banks cap the number of financed rental properties they will hold for one borrower. When you reach that ceiling, the answer is not to stop, it is to move new purchases to credit unions, monoline lenders and portfolio lenders who count differently.
Order matters too. Refinancing an existing property to pull the next down payment, before you make the next offer, keeps your ratios cleaner than trying to do both at once.
A longer amortization lowers the monthly payment and improves cash flow, at the cost of more interest over time. On rentals that trade-off is often worth it, because the payment is what determines whether the property feeds you or you feed it.
Interest on money borrowed to earn rental income is generally deductible, while interest on a personal mortgage is not. Structuring the borrowing with that in mind, and keeping the accounts clean, is something your accountant will thank you for later.
Unlike bank employees who work for one lender, mortgage brokers work for your clients. We're licensed professionals with a legal duty to find you the best solution—not push a particular product.
Get Started