Lenders typically credit 50% to 80% of the rents, rarely all of it, to leave a margin for vacancy and upkeep. The percentage varies enough from one lender to the next to change the amount you qualify for.
Owner-occupied or investment
Live in one unit and the down payment stays in residential territory. A fully tenanted building needs 20% or more. That gap is often what separates a financeable file from one that doesn’t pass.
Keep a cushion for work
Vacancy, maintenance, repairs and rising costs all need room in the plan. A plex approved too tightly can become a burden after closing.
Documents to gather
What the lender will ask for.
Active leases
Rents used
Planned occupancy
Annual expenses
Down payment
Expected repairs
Frequently asked
At how many units does the file become commercial?+
At five. Up to four units, the building is financed as residential. From five, the decision rests on the building’s net income rather than your personal income, the down payment goes up and the list of lenders gets shorter.
Current rates
Today’s rates, with the fine print.
These rates are indicative. Yours depends on your file, the type of mortgage (insured or not) and the lender. And look at the penalty too, it matters as much as the number.
Buying, renewing, refinancing, or something a bit out of the ordinary: tell us where you’re at, even if it’s still fuzzy. Mathieu gets back to you with next steps and the documents to pull together.
