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Renewing with your bank vs. shopping the market
Most Canadians sign their renewal letter without comparing it to anything else. Here's what that decision actually costs.
Services / Investment properties
Investment properties.
Second properties have different math. I'll run the numbers before you fall for the place.
A rental or second home isn't just "buying another house." Down payment minimums are higher, the rate is usually a touch worse, and the rules for how rental income gets used vary by lender. The math is the math. Knowing which lender does what is what saves you weeks.
Who this is for
Probably you, if any of this is true.
- You already own your primary residence and you're looking at a second property.
- You're at the analysis stage and want a realistic financing picture before you make offers.
- You're scaling — looking at property two, three, or beyond — and the qualification math is getting tighter.
- You're buying a vacation home or a cottage and want to do it the right way.
My approach
How I work an investment file.
- 01
Down payment realism.
Twenty percent minimum on a rental, often higher depending on the lender, your file, and the number of units. I'll tell you what you're actually qualifying for before you put in an offer.
- 02
Rental income math.
Lenders treat rental income differently. Some offset it against the mortgage payment; some add it to your income; some discount it 50%. The right lender for your file depends partly on which method moves your file across the line.
- 03
Debt servicing across the portfolio.
Once you have multiple properties, your Gross Debt Service and Total Debt Service ratios start moving in unexpected ways. I'll lay them out before they become a surprise at the next purchase.
- 04
Insurance and ownership structure.
Personal vs corporate ownership, primary vs rental insurance, condo board restrictions on rentals. Some choices made on property one close doors on property two.
Common questions
Common questions
-
How much down do I need?
Twenty percent on a single rental unit is the floor under CMHC rules. Some lenders want 25%, some go higher for second homes or more complex situations. Co-ownership and corporate purchases can also change the requirement. -
Does rental income count toward qualifying?
Yes, but how much counts varies by lender. Some use a rental offset method (rent subtracts from the mortgage payment), some add the rental to your income at 50% or 80%. The right lender depends on which method makes your file work. -
Can I close in a corporation?
Sometimes, depending on the lender and the structure of the corporation. Most A-lenders prefer personal ownership for residential rentals; some will accept a personal guarantee on a corporate purchase. Tax implications are real. Talk to an accountant before deciding. -
Is the rate higher on a rental property?
Usually a small premium over an owner-occupied rate, varying by lender. The bigger driver of total cost over time is which lender you go with and how they treat your specific file. -
What if I'm at the lender's portfolio cap?
Most lenders cap the number of rental properties they'll finance for one borrower. When you hit that ceiling, the strategy shifts to spreading new files across different lenders. I plan for that early when I see a growing portfolio.
Get in touch
Bring the property. I'll bring the number.
Send the address, the asking price, and the expected rent. I'll come back with a credible read on whether the file qualifies.
The form
Tell me a bit about what you're looking into.
I read every message and reply personally, usually within a business day. No pitch waiting on the other end.
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