Rental Property Mortgage in Canada: Down Payment, Rates and Rental Income Rules
Non-owner-occupied property needs 20% down and prices on the uninsured shelf. How lenders in Canada treat the rental income is what decides how many you can hold.
Who a rental property mortgage covers
- Buyers of a first investment property
- Owners converting a principal residence to a rental
- Investors whose ratios have stopped working at their current lender
What lenders look for on a rental property mortgage file
| 20% down minimum | Default insurance is unavailable on non-owner-occupied property, so this is a hard floor. |
| Rental offset | The lender subtracts a share of the rent — often 50% to 80% — from the property’s costs. Far more generous than add-back and the reason some investors can hold many properties. |
| Rental add-back | The lender adds a share of net rental income to your income instead. Weaker, and it is what most big banks use. |
| Property count limits | Many lenders cap the number of financed properties, commonly at four or five. Beyond that the file moves to alternative or commercial lending. |
Rental Property mortgage rates: what it costs
Rentals price on the uninsured shelf, typically 20 to 40 basis points above owner-occupied. Some lenders add a further rental premium.
Track Best Renewal Offers up to 90 Days before Maturity
Get notified on best mortgage rates for transfer and refinance to compare your monthly savings.
Rental Property by province
Land transfer tax, minimum down payment and typical prices differ by province.
Rental vs owner-occupied financing
The same property is financed on different terms depending on whether you live in it, and the rental rules are stricter in every direction.
| You live in it | Pure rental | |
|---|---|---|
| Minimum down payment | 5% on the first $500,000, 10% on the portion to $1.5 million. | 20%, with no default insurance available. |
| Rate | Insured or insurable pricing. | Uninsured pricing — higher. |
| How rent is counted | Not applicable, beyond a basement suite in some cases. | Part of the rent is added to income, or the expenses are offset against it. Lenders differ sharply here, and the difference decides how much you qualify for. |
| Best for | A primary residence, including one with a suite. | An investor who has the 20% and whose file can carry the stricter test. |
Which lender you use matters most on a rental, because the rental-income rule is the single biggest variable in what you can borrow.
Rental Property mortgage questions
How much down do I need?
20% minimum on a non-owner-occupied property, and no exceptions — the insurers will not cover it at any price.
Will the rent help me qualify?
Considerably, but how much depends entirely on whether the lender uses offset or add-back. The same file can pass at one lender and fail at another on this single policy difference, which is the main reason investors use brokers.
What if I move out and rent my current home?
That converts it to a rental for underwriting. If you are keeping it and buying another, both properties get assessed, and the offset-versus-add-back question decides whether the numbers work.
Will applying hurt my credit score?
A single mortgage enquiry has a small, short-lived effect. Several lenders pulling your bureau separately over weeks is worse than one broker pulling it once and taking that file to several lenders.
How long does this usually take?
A straightforward file takes a few weeks from application to approval. Alternative and private lending can move faster because less is being verified — sometimes days.
Have a rental property file looked at
When you are ready to do something with these numbers, we will introduce you to a licensed broker who can put the file in front of lenders. Nothing here obliges you to.
