John Antle | Mortgages Beyond The Bank

Your Kelowna Mortgage Broker

You may already own a home and are considering purchasing property for investment purposes. This is often a great strategy to improve your net worth, however there are some differences between financing options for an Investment Property compared to a residential property.

Product FAQs

Is there a difference between Investment Property financing if I live in one of the units?

Yes, generally the qualification process is simpler if you plan to reside in the property you are purchasing.

If I purchase a multi-unit building will I be able to finance 100% of the suites?

Yes, if you plan to purchase a property that consists of more than 4 units, you would be required to apply for a commercial mortgage. The process and qualification criteria for a commercial mortgage is much stricter than a residential mortgage. If you purchase property with under 4 units the mortgage would be much easier to be approved.

Would the lender consider income from the suites to help me qualify for the mortgage?

Yes, most lenders will consider a percentage of the rent you will earn in future, but not the total amount of the income.

Are interest rates the same for an Investment Property as a residential mortgage?

If you are purchasing a property with more than 4 units, you would be approved for a commercial mortgage. This will have a higher interest rate charged and possibly include different terms than a residential mortgage. Under 4 units will generally  be similar rates and terms.

If I plan to live in one of the units would that make a difference?

Yes, if one of the suites are going to be owner occupied the approval process will generally be easier. The big difference is that most lenders will require a smaller down payment if you are planning to occupy one of the units as your principle residence.

Do all lenders offer mortgage financing to purchase an Investment Property?

No, some lenders do not offer this financing option. Your mortgage broker will assist you in recommending the best lender to approve a mortgage to buy an Investment Property.

Is it a requirement to have CMHC (Canada Mortgage and Housing Corporation) approval if I wish to purchase an Investment Property?

In some instance CMHC default insurance would be required depending on the amount of down payment you have and if you will occupy the property as your residence.

What is the down payment required if I am purchasing an Investment Property?

There are several things that lenders will consider in determining your down payment. For example: If you are purchasing a property strictly for investment purposes and will not occupy any of the units, most lenders will require a 20% down payment. If there are one or two units, and the purchaser will occupy one suite, some lenders will require a 5% minimum down payment. This rises to 10% if the property has three to four units.  Speak to your mortgage broker to determine the current lending regulations based on your situation.

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