Buy a duplex, triplex, or fourplex with just 5% down.

A worked file: a $900,000 duplex at the tiered minimum down

Here is one property from purchase price to monthly payment. It is illustrative — one price, one rate, one province's property tax — but every figure is computed rather than quoted, so you can follow the method with your own numbers.

The cash in. On $900,000 the legal minimum is tiered: 5% of the first $500,000 plus 10% of the $400,000 above it, which is $65,000 — a blended 7.2%, not 5%. That leaves a base mortgage of $835,000, or 92.8% of value.

The insurance premium. At that loan-to-value the premium is 4.00% of the loan — $33,400 — financed onto the mortgage rather than paid in cash, taking the balance to $868,400. Note that this is the homeowner schedule; see the premium section below for what changes on three and four units.

The payment. At the 3.94% insured five-year fixed over 25 years, that is $4,540/month in principal and interest. Qualification is a different number: lenders test you at the greater of your rate plus two points or 5.25% — 5.94% here — which produces a $5,525 payment for ratio purposes, plus roughly $750 of monthly property tax and a heat allowance.

The rent. With the lower unit at $2,200/month, the household income this file needs falls from $198,000 — what the same $900,000 purchase would demand with no rental unit — to $164,000 under a 50% offset. That $34,000 difference is the whole argument for buying a multiplex instead of a house at the same price, and the comparison table above shows how it moves again depending on which method your lender uses.

How rental income changes your debt-service ratios

Two ratios size every residential mortgage. GDS — gross debt service — is the share of your gross income consumed by the home itself: principal, interest, property tax and heat, capped around 39%. TDS — total debt service — adds every other obligation, car loans, credit-card minimums, student debt, and is capped around 44%. Your maximum mortgage is whichever of the two binds first.

A multiplex changes the arithmetic because the rent enters one of those ratios, and where it enters is the part almost nobody explains. Under an offset the credit is subtracted from the carrying cost in the numerator, so a dollar of rent relieves a dollar of cost — and because the numerator is measured against a 39% ceiling, that dollar does the work of about 2.56. Under an addition the credit goes into the denominator as income, where a dollar is worth a dollar.

That is why the same buyer can carry a larger mortgage on a duplex than on a house at the identical price, and it is why the lender's method matters as much as the lender's rate. On the worked file above the spread between methods is $7,600 of required income. Our stress test calculator and the GDS and TDS guide run the ratios on your own figures.

What the insurance premium actually costs — and what changes above two units

The premium is a percentage of the mortgage, set by loan-to-value, financed onto the loan rather than paid at closing. On the homeowner schedule the bands run 0.60% to 65% LTV, 1.70% to 75% LTV, 2.40% to 80% LTV, 2.80% to 85% LTV, 3.10% to 90% LTV, 4.00% to 95% LTV¹ — which is how the worked file above reaches $33,400 at 92.8% loan-to-value. In Ontario, provincial sales tax on that premium is payable in cash at closing rather than financed, which catches people out.

Three and four units are not priced the same. The insurers publish a separate, higher premium schedule for 3-4 unit properties than for 1-2 unit properties at the same loan-to-value, which is a real cost difference and one most competitor pages never mention. We are not printing those percentages here, because the figure that matters is the one on the insurer's current rate card on the day your file is submitted, and a number transcribed onto a web page ages badly. Ask us for it against your actual purchase and we will quote it from the live card — and if you are comparing a duplex against a triplex at a similar price, that premium difference belongs in the comparison alongside the rent.

How does rental income from the other units help me qualify?

This is where a multiplex outperforms a single-family purchase at the same price. Lenders treat the rent from units you don't occupy as qualifying income — either by rental offset (typically 50%, subtracted from the property's carrying costs before the ratios are taken) or add-to-income (up to 100%, added to your gross income). Which of the two qualifies you for more is not fixed, and the common shorthand that add-to-income is always stronger does not survive the arithmetic: because an offset lands on the cost side of the ratio, it is leveraged by the ratio itself, and the two methods cross over at an offset roughly equal to the GDS limit. The comparison table above works both on one file. Because policies vary widely across our 100+ lenders, including specialty multi-unit programs, we model your rent stack against each one and place the file where your qualifying income lands highest.

What's the difference between an owner-occupied and a non-owner-occupied 2-4 unit?

Occupancy is the hinge the entire program turns on. If you occupy at least one unit, the property qualifies for the insured low-down-payment path — as little as 5% down with A-lender rates and no investment-property premium. The moment you don't occupy it, the same building becomes a pure investment property: 20% down minimum, no insured option, and pricing that reflects the higher risk. Many buyers don't realize that owning another home elsewhere can disqualify the duplex from the insured stream if you can't credibly establish it as your principal residence. The strategic play we run with clients is to buy owner-occupied, lease up the building, then refinance into a conventional investment property mortgage once the loan-to-value allows it — releasing equity for the next purchase while keeping your low-down entry cost intact. The timeline for that is modelled above rather than assumed.

What happens once I go to 5 or more units?

At five units or more you leave the residential insured world entirely and enter multi-family commercial financing, most often through CMHC MLI Select. The mechanics are different and, for the right project, more powerful. Instead of a fixed down-payment threshold, MLI Select awards points for energy efficiency, affordability, and accessibility commitments — and those points stack to unlock higher loan-to-value (up to 95% on the strongest applications) and amortizations stretching to 40 or even 50 years. A residential multiplex is qualified largely on your personal income; an MLI Select deal is underwritten primarily on the building's net operating income and the points you can commit to. That means more documentation, longer timelines, and energy modelling — but materially better leverage and cashflow. Our multi-unit team structures the point stack so the numbers clear before you're deep into the process.

What about zoning, appraisals, and adding a unit with renovation financing?

The cleanest multiplex deals are properties where each unit is legal and conforming — a registered legal second or third unit, not an unpermitted basement apartment that an appraiser or lender will refuse to recognize. Confirm municipal zoning and any unit registration before you firm up, because an illegal unit can sink both the appraised value and the rental income you were counting on to qualify. The appraisal matters more here than on a single-family file: it establishes both market value and the market-rent figure lenders lean on.

Two ownership costs belong in the same diligence and rarely make it in. Property insurance on a tenanted 2-4 unit is quoted as a different product from a single-family policy and generally costs more, and your lender will not fund without the binder in place. Municipal treatment can differ too — some municipalities assess or bill a multi-unit property differently, and a few levy licensing or inspection fees on rental units. Neither is large next to the mortgage, but both belong in your carrying-cost math rather than in a surprise after closing. Confirm each with your insurer and the municipality while you are confirming zoning.

There's also real upside in stacking strategies — buying a duplex and converting it to a triplex by adding a legal unit, financed through a renovation mortgage or a construction draw. As an FSRA-licensed brokerage (#13737) with fully disclosed fees and service in 50+ languages, we coordinate the appraisal, zoning, and financing pieces so they line up at closing.

An illustrative multiplex file

This is an illustrative composite built from the rules above — not a specific client, and not a promised outcome.

A first-time buyer and their partner are approved for a house at roughly $198,000 of household income and cannot find one they want at that price. They look instead at a legal duplex near $900,000: upper unit for themselves, registered lower unit already tenanted at $2,200.

Their own bank prices the file well and applies a 50% offset, which brings the income requirement down to about $164,000 — inside what they earn. A second lender offers a slightly sharper rate but adds the rent to income instead, needing $171,600, which is outside it. The cheaper rate is on the file they cannot get approved for; the decision is made on the method, not the rate, and it is not close.

The two things that nearly derail it are the ones this page keeps returning to. The lower unit's registration has to be confirmed with the municipality before the financing condition clears, because an unregistered unit would remove the rent from the calculation entirely and with it the approval. And the insurance binder on a tenanted duplex takes longer to arrange than either of them expected. Both are ordinary; both are solved by starting them in week one rather than week three. Every real file is assessed on its own facts.