Mortgages Built for Rental Income.
Whether you're financing your first rental or adding to a small portfolio across Vaughan, York Region and the GTA, the mortgage is a different animal than the one on your own home. Paul helps you set the down payment, use rental income the right way, and structure the loan so the numbers actually work month to month.
What's different for rentals
Non-owner-occupied financing follows its own set of rules. A few of the big ones.
A rental you won't live in typically calls for 20% or more down — mortgage default insurance for low-down-payment purchases is generally reserved for properties you occupy. The exact minimum depends on the lender, the property type and how many units it has.
Rental mortgages can price and qualify differently than a mortgage on your principal residence. Lenders weigh the property as an income source, so both the rate offered and the way you're assessed can vary from product to product.
You'll usually need landlord/rental property coverage rather than a standard homeowner policy, and lenders may look more closely at condition, zoning and legal use. Illustrative only — the property and lender drive the specifics.
How rental income helps you qualify
Rental income can do real work in your application — but lenders don't simply add the full rent to your income. Instead they use a portion of it, and they don't all do it the same way.
Two common approaches
Offset: a share of the rent (a common example is a set percentage of gross rent) is subtracted from the property's carrying costs, so only the shortfall — if any — counts against you.
Add-back: a share of the rent is added to your qualifying income and the full property payment sits in your debt load. Whether a lender leans offset or add-back can meaningfully change how much you qualify for.
Because the treatment varies by lender and product, part of Paul's job is matching your rent, property and goals to the lender whose method gives you the strongest, cleanest result. This is general information, not a commitment to lend — your approval depends on your full application.
Structuring for cash flow
Same purchase price, different structure — and the monthly picture can look completely different.
Amortization choices
A longer amortization lowers the required monthly payment and can help a tight rental cash-flow, while a shorter one builds equity faster. The right call depends on your reserves and how you want the property to perform.
Fixed vs variable
Fixed brings a predictable payment you can budget the rent around; variable can start lower but moves with rates. On a rental, payment stability versus flexibility is a genuine trade-off worth weighing deliberately.
Using equity for the down payment
Equity from your home or another property — via a refinance or a line of credit — is a common source of rental down payments. It has to fit your overall debt servicing, so it's planned, not assumed.
Keeping reserves
Vacancies, repairs and rate resets are part of owning rentals. Structuring so you keep a cash cushion, rather than stretching to the last dollar, is often what keeps a good deal a good deal.
What Paul reviews
Before recommending a structure, Paul looks at the property and your bigger picture together.
Existing leases, current rents and — for a vacant or under-rented unit — a realistic market-rent view, so the income used in your file is one a lender will actually accept.
Type, number of units, condition and legal use. These shape both which lenders will consider it and the down payment and terms they'll offer.
How this mortgage sits alongside your home, any existing rentals and other obligations — the whole picture is what qualifies, not the property in isolation.
Where the down payment comes from — savings, gifted funds, or equity pulled from another property — and how that source affects the structure and the numbers.
Related pages
Mortgage Solutions
See how this fits with Paul's mortgage solutions.
Learning Centre
Plain-language guides on buying, costs, credit and more.
Investment Properties
Financing rental and income properties as part of your investment plan.
Cash Flow Analysis
Test how a rental performs before you commit to the purchase.
Multi-Unit Financing
Options for duplexes, triplexes and larger multi-unit buildings.
Adding a rental to your plan?
Let's line up financing that works with the rent and your goals.