What Is a Rental Rate Mortgage?
Rental mortgages are a unique type of mortgage used exclusively for buildings that owners purchase with the intention of renting to tenants. These rental income property loans are subject to different rules than regular properties.
How Does a Second Property Mortgage Differ from a Regular Mortgage?
The biggest difference is that generally, investment properties require a down payment of at least 20%. The exception to this is if you plan to occupy the property yourself and rent out a section of the property, such as a basement suite or other units in the building. In the case of an owner-occupied property, you may be eligible to pay a down payment of as little as 5-10%.
What Are the Advantages of a Rental Mortgage?
Banks and lenders commonly offer rental mortgages with higher-than-average interest rates. This is because lenders consider clients with more than one mortgage as a bigger liability. To qualify for a second mortgage, you may have to take further measures to prove your income than you did with your first mortgage.
However, if you plan on making revenue from tenants with the property in question, you can use a part of your future rental income to support your mortgage application. This will increase your income and help you qualify for a larger mortgage. Similarly, depending on the lender’s policy, you may be able to use any existing equity you own to finance the purchase of your second property.
The rules governing this process are complex and depend on many situation-specific factors. Thankfully, our mortgage advisors are the best in the business. We can walk you through the fine print and red tape on the road to investment property ownership.
How Do I Find an Income Property Mortgage?
Not all lenders offer income property mortgages since they are a higher risk product. At Today's Mortgage Choice, we’ve built and maintained trustworthy lender relationships over the years. We work with an impressive array of banks and private lenders, many of which are happy to work with investors like you. We’re your best bet to finding the lowest rate investment property mortgage. We’ll vouch for your financial stability on your behalf, helping you find the ideal loan for your financial situation.
Find the Best Investment Property Mortgage Rates Today
A second property is an excellent investment opportunity as it gives you access to a passive revenue stream, potential capital appreciation, and tax advantages.
The brokers at Today's Mortgage Choice boast a wealth of knowledge in Canadian investment property policies. Take advantage and book a consultation with one of our professionals today to discover the financial solutions available to you. We look forward to hearing from you.