Investment Property Mortgage
Canada: Rates, Rules
& How to Qualify

You need at least 20% down to buy a rental property you won't live in. If you live in one unit of a 2- to 4-unit home, you can put down less: 5% on the first $500,000 of a duplex, or 10% on a triplex or fourplex. Lenders count part of the rent as income, often 50% and up to 100% in some programs.

Lenders use two broad methods. Add-back: a percentage of gross rent (commonly 50%, up to 100% in some programs) is added to your qualifying income. For insured files, CMHC allows up to 100% of gross rent on an owner-occupied 2-unit, and up to 50% (or a net rental income approach) on 3-4 units. Offset: a share of rent is subtracted from the rental property’s own carrying costs, and only any shortfall counts as debt, which conventional lenders often use for existing rentals. The percentage and method vary by lender, so we pick the one that gives your file the most room.

Usually, yes. Lenders generally accept an appraiser’s market-rent estimate or a signed lease for the property you’re buying; how much of that rent counts depends on the lender’s method and the program (for example, up to 100% for an insured owner-occupied 2-unit, commonly 50% for 3-4 units). Specialty lenders may count more with strong investor experience.

On non-owner-occupied 1-4 unit properties: yes, 20% minimum (uninsured rules). If you live in one unit, the file can be insured through CMHC, Sagen or Canada Guaranty: the 5%/10% minimum tiers apply to a duplex, and a triplex or fourplex needs at least 10% down. On 5+ unit multifamily, CMHC MLI Select on an existing property allows up to 85% LTV at 50 points (15% down) and up to 95% LTV at 70+ points (5% down); conventional commercial financing typically needs 25-35% down.

BRRRR = Buy, Renovate, Rent, Refinance, Repeat. Buy under-market property → renovate to force appreciation → rent at market → refinance at new appraised value to pull out down-payment capital → repeat. We use lenders who refinance at appraised post-reno value (not original purchase price), often within 6-12 months, with the refinance capped at 80% of the new value at prime lenders.

Yes — and it’s the most common strategy for scaling investors. The new lender treats your HELOC monthly payment as a debt obligation in TDS calc, and the HELOC interest is generally tax-deductible when the borrowed money is used to earn rental or business income, because deductibility follows the use of the funds (consult your CPA). We coordinate the readvanceable structure on your primary residence to maximize accessible equity.

Some Canadian lenders cap how many rental properties (or how much total rental exposure) they’ll finance for one borrower, and the caps differ by lender and change over time. Once you hit a lender’s cap, you move your next file to a lender without that limit or to commercial-style underwriting for the portfolio. We check current caps before we submit.

Yes — Holdco and Bare Trust structures are common for investors at scale. Each adds complexity (corporate guarantor, additional underwriting; in our experience, corporate files can price 0.25–0.50% higher). We work with your accountant and real-estate lawyer to structure cleanly. Bare Trust is the lighter option (mortgage in personal name, beneficial ownership in corp) and is generally preferred for files under 5 doors.

Debt Service Coverage Ratio = qualifying based on the property’s rental cashflow rather than your personal income. Common in the US and available in Canada from a small number of alternative lenders, usually for experienced investors with several doors. Typical DSCR requirement: 1.10-1.25× (property cash flow must cover 110-125% of the mortgage payment). Expect a rate premium over a fully qualified A file, but it unlocks files that can’t qualify on personal income.

The new mortgage is qualified at the greater of your contract rate + 2% or 5.25%, and the payments on your home and every other rental count in your TDS. As you scale, those combined ratios become the binding constraint, not appraised value, which is why the lender’s rental-income method matters so much for portfolio investors.

MLI Select is CMHC’s points-based insurance product for 5+ unit residential properties. Commitments on affordable rents, energy efficiency or accessibility earn points: on an existing property, 50 points unlocks up to 85% LTV and 40-year amortization, 70 points up to 95% LTV and 45 years, and 100 points up to 95% LTV and 50 years. Insured pricing is typically well below uninsured commercial debt. See our CMHC MLI Select guide for the full breakdown.