Mortgage For Investment Property
If you’re looking to generate extra income from a rental home or buy a fixer-upper to make a profit, a mortgage for investment property may be in your future. It is typically higher than the rate you pay for your primary residence and requires more stringent eligibility requirements.
Knowing about the ups and downs of investment property mortgage programs will make it easier for you to pick up the right one for your real estate investment purposes, and more specifically why you should choose CANGUARD.
What is a mortgage for an investment property?
This is an umbrella term that refers to any type of mortgage loan used to purchase property that is purchased as an investment rather than for personal use. In most cases, applicants already have a mortgage and want to increase their assets by purchasing another property to rent or renovate and sell.
You may have saved a good amount of money, received an inheritance, or been the beneficiary of a generous bonus and view real estate as a sound investment.
Different types of investment property mortgage
The types of mortgages available for investment properties in Canada are:
Buy-to-let (BTL) mortgages: This is the best mortgage for rental property. BTL mortgages have specific subcategories such as:
- House of multiple occupancies (HMO) mortgage: What you need if you plan to have 3 or more tenants who are not in the same household.
- Commercial BTL mortgage: What you need when buying and renting business facilities such as office space, stores, warehouses, and restaurants.
- Overseas BTL mortgage: What you need if you want to buy a hideaway under the Turkish sun or rent a small chateau in the South of France.
- Buy-to-sell mortgages: If you find a property that is worn out, this short-term loan can make it easier for you to buy and renovate it before you sell it, ideally making a profit.
If you are not sure which of these is right for you, you can consult our professional real estate agents for each option to assess your situation and suggest the most suitable one.
How to get an investment mortgage for a property
If you have decided to look for a mortgage for your investment property in Canada, start by:
Be sure whether you can afford it or not
You will need enough money for deposits, fees, and monthly repayments on top of any existing repayments you may already have on your mortgage. Some of that could come from the rent you charge if you decide to buy and rent.
Decide on the type
Sometimes only one type of investment property mortgage is available, which makes it easier to make decisions, but if you may be able to apply for several different mortgages, do your research and decide which deal you prefer.
Submit the application
Consult with our staff, they can then work together to collect the necessary documents so you can confidently submit and apply for a mortgage.
An investment property mortgage can be a world unto itself. That’s why it makes sense to partner with an expert who understands the nuances of each type of investment mortgage and how it works. The brokers we at CANGUARD work with have specific training and expertise and provide tailored support for researching and applying for specific real estate investment mortgages rather than providing generic mortgage advice. This support will increase your chances of getting mortgage approval and a better deal than finding it on your own.
Mortgage for investment property FAQ
WHAT IS A MORTGAGE FOR INVESTMENT PROPERTY?
It is a loan for the purchase of investment property. This includes buying property for rental income, or renovating it and selling it for profit
HOW MANY MORTGAGES FOR INVESTMENT PROPERTY CAN I HAVE?
There is no cap (aside from the 10 BTL property limit that some lenders apply) and in fact, some lenders only deal with people who have an entire portfolio of investment properties. However, others may have limitations on what they feel comfortable with.
AM I ABLE TO GET A SECOND MORTGAGE ON MY RENTAL PROPERTY?
Yes, if the department store has enough capital and the rental income is enough to cover both repayments you have to make. This is called a second charge buy-to-let mortgage.