Buying an Investment Property? Follow These Steps to Ensure Your Mortgage is Approved

Marci • October 27, 2014

Are you thinking about buying a house, condo or multi-unit residence as an investment property? If you plan on applying for mortgage financing to cover some of the up-front purchase costs you’ll need to be prepared and understand what’s required to ensure that your application is approved. In today’s blog post we’ll share a few tips regarding mortgages for investment properties and what you’ll need to have ready.
Happy Young Couple Discussing With Consultant

Will You Be Living in One of the Units?

An important consideration when buying an investment property is whether or not you’ll be living in one of the units – a situation referred to as “owner-occupied”. This is a key consideration and will impact how much of a down payment a lender will expect from you, your mortgage default insurance and more. For example, if your property will be occupied by renters you’ll likely need a down payment of 20 percent or more, while an owner-occupied property will typically be closer to 5 to 10 percent.

Know Your Numbers Inside and Out

You’ll also want to have a good grasp of your numbers and how small changes can affect your ability to pay back your mortgage as your lender will absolutely know these details. Spend some time researching and calculating your gross debt service ratio (or “GDS”) and total debt service (or “TDS”), which indicates how much mortgage you can reasonably afford on the property after interest, taxes, other debts and rental expenses are taken into consideration.

Understand Your Zoning and How It Affects Your Mortgage

The zoning of your investment property is another key factor that can drastically change your mortgage. For example, if you have a small four-unit townhouse complex you may have a strict residential zoning which will allow you to take out a mortgage much like the one on your own home. However, if you are buying a small apartment or condo development with a number of units it may have mixed zoning or be zoned for commercial use, in which case you’ll be expected to take out a commercial real estate mortgage.

If It’s a Business, Treat It Like One

If you’re going to be running your investment property like a business, it’s best to treat it like one from the start. If you have a business plan and marketing plan for the residences, be sure to have this information put together and be ready to show it to your lender. As with any loan, your financier wants to ensure that they are taking on as little risk as possible. The more that you can show that you are ready for real estate investing and that you have a quick path to profitability, the less risky your loan will appear to be.

Buying an investment property is an excellent way to diversify your portfolio while adding a long-term asset that can provide an immediate income stream. Contact me by phone or email today and I’d be happy to share my mortgage expertise to help ensure that your financing has the best chance of being approved.

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Bank of Canada Holds Rate at 2.25% — March 18, 2026

By Marci Deane • March 18, 2026
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. For anyone watching the mortgage market — whether you're renewing, purchasing, or simply keeping an eye on borrowing costs — here's a breakdown of what was announced and what it may mean for you.

Is Now the Right Time to Buy? A Look at Canada's 2026 Housing Market

By Marci Deane • March 17, 2026
For many Canadians, the dream of homeownership has felt like a moving target. After years of market volatility, shifting interest rates, and economic uncertainty, you might be wondering: is 2026 finally the year to make a move?

Everything You Should Know Before Buying a Home

By Marci Deane • March 11, 2026
Thinking About Buying a Home? Here’s What to Know Before You Start Whether you're buying your very first home or preparing for your next move, the process can feel overwhelming—especially with so many unknowns. But it doesn’t have to be. With the right guidance and preparation, you can approach your home purchase with clarity and confidence. This article will walk you through a high-level overview of what lenders look for and what you’ll need to consider in the early stages of buying a home. Once you’re ready to move forward with a pre-approval, we’ll dive into the details together. 1. Are You Credit-Ready? One of the first things a lender will evaluate is your credit history. Your credit profile helps determine your risk level—and whether you're likely to repay your mortgage as agreed. To be considered “established,” you’ll need: At least two active credit accounts (like credit cards, loans, or lines of credit) Each with a minimum limit of $2,500 Reporting for at least two years Just as important: your repayment history. Make all your payments on time, every time. A missed payment won’t usually impact your credit unless you’re 30 days or more past due—but even one slip can lower your score. 2. Is Your Income Reliable? Lenders are trusting you with hundreds of thousands of dollars, so they want to be confident that your income is stable enough to support regular mortgage payments. Salaried employees in permanent positions generally have the easiest time qualifying. If you’re self-employed, or your income includes commission, overtime, or bonuses, expect to provide at least two years’ worth of income documentation. The more predictable your income, the easier it is to qualify. 3. What’s Your Down Payment Plan? Every mortgage requires some amount of money upfront. In Canada, the minimum down payment is: 5% on the first $500,000 of the purchase price 10% on the portion above $500,000 20% for homes over $1 million You’ll also need to show proof of at least 1.5% of the purchase price for closing costs (think legal fees, appraisals, and taxes). The best source of a down payment is your own savings, supported by a 90-day history in your bank account. But gifted funds from immediate family and proceeds from a property sale are also acceptable. 4. How Much Can You Actually Afford? There’s a big difference between what you feel you can afford and what you can prove you can afford. Lenders base your approval on verifiable documentation—not assumptions. Your approval amount depends on a variety of factors, including: Income and employment history Existing debts Credit score Down payment amount Property taxes and heating costs for the home All of these factors are used to calculate your debt service ratios—a key indicator of whether your mortgage is affordable. Start Early, Plan Smart Even if you’re months (or more) away from buying, the best time to start planning is now. When you work with an independent mortgage professional, you get access to expert advice at no cost to you. We can: Review your credit profile Help you understand how lenders view your income Guide your down payment planning Determine how much you can qualify to borrow Build a roadmap if your finances need some fine-tuning If you're ready to start mapping out your home buying plan or want to know where you stand today, let’s talk. It would be a pleasure to help you get mortgage-ready.