If you’re looking to acquire a rental property to build income and equity, you’re in the right place. Lower gets you qualified and organized, so you can secure your next property with confidence at a competitive rate.
Lower is Canada’s premium mortgage broker offering mortgages for every type of new property investment.
We’ll check 40+ lenders and 10,000 products in the market.
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Buying a home for your family is so important. Ammar made us feel comfortable with at ease with this process. He took his time to understand our needs but was very quick with the process.
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I bought my first home a few years back and used @lowerdotca. It was a great experience so I called them when I was ready to purchase my second house. Ammar and his team go above and beyond.
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We had a great experience with Ammar and his team. He explained us all of our options without us feeling the pressure or rushed. I highly recommend.
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I was extremely nervous being a first time home buyer in Toronto. With prices skyrocketing I wasn't sure this was the right move but after speaking to Ammar, he made me feel confident.
Ammar went above and beyond our expectations, answering all of our questions and securing us an even better rate that we'd hoped for! The entire process was very smooth and we will be recommending his mortgage services.
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I was working with a broker before and it was a nightmare. Thank goodness I found Ammar. He was always quick to respond to help us. We will definitely be using Ammar when it’s time to renew our home.
I was anxious being a first-time home buyer in the Toronto market. Ammar was referred to me by a friend of the family and he definitely made the process much easier to work through!
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We really appreciated Damien’s patience and compassion through this entire process. We are very happy with our rate and how easy he made our experience.
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Ammar was amazing to work with from start to finish. Found us such an excellent rate. He went above and beyond for us.
@lowerdotca helped me with my purchase of my third business property. He found us the best rates. I would recommend Shawn if you need to speak to anyone.
My family member recommend @lowerdotca and to speak to Ammar. He doesn't disappoint. I was very satisfied with his service.
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My previous mortgage broker retired so I had to find a new one. When I contacted Lower. The whole team is amazing. I was impressed right off the bat. Very professional.
@lowerdotca was recommended to me by a fellow business owner who used their services to refinance their property. I found Ammar to be knowledgeable and efficient in helping us to reduce our rate and liquidate the capital we needed to expand our business.
So glad I found Damien and Lower. The last time I had to renew my mortgage was a headache. Damine is familar with the challenges of applying as a self-employed individual and got our re-financing done without any trouble.
Lower gave us confidence in our purchase. I won’t even hesitate calling because they are just that great! Very easy to understand and work with.
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I've worked with Lower many times. I highly recommend them to my clients who are in need. They work hard to get the best rates.
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I was referred to Damien because I wanted to purchase the building my business is in when my landlord decided to sell. We went over all of my options and I ended up not only managing to purchase the building but also get extra funds to
Very reliable team. They are straight forward which I liked. They are honest but they also work very hard to find the best rates for you.
I had the pleasure of speaking to Shawn about a few things. Including purchasing property for my business and we got approved very quick. I will be using his services for my business in the future.
I used @lowerdotca to help with the purchase of my second investment property. Damien made the process quick and straightforward, which I appreciated as I have a hectic schedule.
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No, you can’t deduct interest on an investment property. You can use the mortgage interest deduction to reduce your taxable income by the total mortgage interest you paid. Also, the mortgage interest can be written off as a business expense. It helps reduce taxable income.
Yes, you can get a 30-year mortgage for an investment property. The financing for second houses is a 30-year mortgage. You can still have other options for terms of 10 or 20 years. The best loan term for your investment mortgage can also be affected by interest fees, investment costs, and daily spending. A 30-year loan will offer lower monthly payments. But it comes with higher interest costs.
You can get a mortgage for an investment property based on your financial situation. You can gain a mortgage with a low-interest rate if you score over 650. You'll also need a significant financial budget and a down payment.
You will get a lower mortgage rate than those for owner-occupied mortgages when you make a big down payment. The minimum down payment for a loan for an investment property mortgage rate is 20 percent. You will only get lower rates when it is over 30 percent.
Business loan companies have stricter requirements for a second mortgage on an investment property than a first mortgage. You’ll need to verify that you can make two mortgage payments.
An investment property mortgage can be a valuable financial tool for individuals looking to build long-term wealth through real estate. However, getting an investment property loan is different from obtaining a mortgage for a primary residence, as lenders apply stricter qualification criteria and higher down payment requirements.
Investment property mortgages are loans provided by banks or private lenders to purchase real estate intended for income generation. These properties can generate returns through rental income or long-term appreciation when sold at a higher value.
Unlike mortgages for primary residences, investment property mortgages typically require a larger down payment (usually 20% or more) and may come with stricter approval requirements due to increased lender risk.
This article will explain what investment property mortgages are, the different types, their pros and cons, how to qualify, key factors that influence approval in Canada, and important considerations for new investors.
An investment property mortgage is a loan used to buy equity with the intention of generating income or capital growth. Unlike a primary residence mortgage, the property is not intended for personal living purposes.
Income from an investment property can be earned in two main ways:
For example, an investor might purchase a home, rent it out for several years, and later sell it for a profit once its value increases.
The type of property purchased can also affect mortgage terms, interest rates, and down payment requirements.
Investment properties generally fall into three main categories:
These include single-family homes, duplexes, and multi-unit residential buildings. Investors typically earn income by renting these properties or selling them after value appreciation.
Commercial properties are used for business purposes and may include office buildings, retail spaces, warehouses, and mixed commercial units. These properties often require larger investments and can involve more complex financing.
Mixed-use properties combine residential and commercial spaces. For example, a building may have retail space on the ground floor and residential units above. These properties can offer diversified income streams.
Understanding the mechanics of these mortgages can help investors make better decisions.
When you apply for an investment property mortgage, lenders typically assess:
In many cases, lenders may include a portion of expected rental income when calculating affordability. This is known as rental offsetting, and it can help improve your borrowing capacity if the property is expected to generate strong rental returns.
However, lenders usually apply a rental income stress test, meaning they only count a percentage of projected rent to account for vacancy risks.
Like any financial product, investment property mortgages come with advantages and risks.
Beyond the mortgage itself, investors should budget for ongoing expenses, including:
Understanding these costs is essential because they directly impact cash flow, which is one of the most important measures of investment success.
To qualify for an investment property mortgage in Canada, lenders typically assess your financial stability and ability to repay the loan.
Common requirements include:
When applying, you may be asked to provide:
Evidence that you have sufficient savings or funds for the required down payment and closing costs.
Information such as listings, purchase agreements, and zoning details.
Lenders will review your credit report to assess your borrowing history and risk level.
Employment letters, pay stubs, or tax documents to verify income stability.
Valid identification such as a driver’s licence or passport.
If you’re preparing to apply, these strategies can help strengthen your application:
Even small improvements in these areas can affect both approval odds and interest rates.
Several key factors affect your mortgage eligibility and interest rate:
Larger loans may receive more competitive rates depending on lender policies, though risk assessment is based on multiple factors.
In Canada, amortization is typically up to 25 years for most investment property mortgages. Longer amortization periods may result in higher total interest costs.
A higher credit score generally improves your chances of approval and may help you secure better interest rates, though it is only one part of the lender’s assessment.
Lenders evaluate your debt-to-income ratio (DTI) to ensure you can manage additional mortgage payments alongside existing obligations.
A larger down payment (20% or more) can improve approval chances and may help you avoid mortgage default insurance requirements.
Different investment strategies can influence the type of mortgage you choose:
Purchase a property and rent it long-term to generate steady cash flow and benefit from appreciation.
Buy undervalued properties, renovate them, and sell them for a profit. These often require shorter-term financing or specialized lending.
Buying duplexes or small apartment buildings can increase rental income stability by diversifying tenants within one property.
Lower is one of Canada’s leading mortgage brokers and the ideal company to assist with your mortgage needs. This broker’s experience spans various mortgage types, from residential to commercial. It also offers clients mortgage refinancing, home equity loans, and debt consolidation solutions.
Pursuing an investment property mortgage can be tricky, especially if it’s your first. Which is why consulting with an expert is advisable. Lower’ experts will quickly set you on the right path to your property investment dreams.
Investment property mortgages can be a powerful tool for building long-term wealth through real estate, but they require careful financial planning and a clear understanding of the risks involved.
Before investing, it is important to:
With the right strategy and financing approach, investment properties can become a valuable part of a long-term wealth-building plan.
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