How Rental Property Mortgages Work

A rental or investment mortgage isn’t quite the same as a standard home loan. Because the property is income-producing and not owner-occupied, lenders see it as a slightly higher risk — which means:

• You’ll usually need a minimum 20% down payment
• Rental income will be used (fully or partially) to help you qualify
• Some lenders require stronger credit or reserve funds
• The property must meet rental market standards (legal suite, zoning, etc.)

My job is to make your approval as strong as possible by matching your deal with the right lender’s policies.

How Lenders Use Rental Income

Every lender calculates rental income differently — understanding this is one of the biggest advantages of working with a broker.

• Rental Offset: Subtracts a portion (typically 50–80%) of rent from the mortgage payment before calculating debt ratios.
• Rental Add-Back: Adds a percentage of rental income to your total income.
• Full Market Rent: Some specialty lenders use full lease amounts or appraised market rent if no lease exists.

Each approach impacts how much you can qualify for — I’ll find the lender whose policy benefits you most.

What Types of Properties Qualify

I work with a wide range of rental and investment scenarios, including:

• Single-family rentals
• Homes with legal suites or basement apartments
• Duplexes, triplexes, and four-plexes
• Small multi-unit or mixed-use properties
• Vacation rentals (case by case)

If your property generates rent — or could — I’ll find the best financing strategy for it.

Down Payment Rules

Rental properties in BC generally require:

• 20% down for non-owner-occupied rentals
• 5%–10% down if you’ll live in one of the units (owner-occupied multi-unit)
• Down payment can come from savings, equity, or gifted funds (depending on lender)

I’ll outline exactly how much you need based on your target price and verify which funds qualify.

Interest Rates & Mortgage Options

Rates for rental mortgages are often slightly higher than for owner-occupied homes — but not always. Because I work with multiple lenders, I can often find investor programs that offer:

• Competitive fixed or variable options
• Longer amortizations for lower payments
• Flexible qualification for more complex files

I’ll compare your options and show you where you’ll get the best blend of rate and approval strength.

Common Investor Mistakes

• Applying through a single bank with strict rental rules
• Not separating rental income and personal finances
• Focusing only on rate instead of future borrowing power
• Failing to plan for the next purchase early enough

I’ll help you avoid those pitfalls so your next rental purchase sets you up for long-term success.

Local Advantage, Proven Experience

As a Cranbrook-based broker, I work daily with lenders who understand smaller markets and rural appraisals — something big-city lenders often struggle with. Whether you’re buying in Fernie, Kimberley, Invermere, Creston, or anywhere across BC, I’ll make sure your file is presented cleanly and approved quickly.

Ready to Get Started?

Text or email me and I’ll review your scenario, calculate how much rental income you can use, and show you what your approval could look like.