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Financing a rental property in BC
Down payment rules, rental income and provincial taxes all work differently when you won't live in the home. We line them up before you buy.
- 5-yr fixed
- 4.69%
- 5-yr variable
- 3.70%
Updated Oct 8 · on approved credit · Compare to bank rates
How lenders see a rental you won't live in
Once you buy a property you won't live in, most of the help available to home buyers falls away. Mortgage insurance with less than 20% down needs one of the units to be your home, so a condo or house bought purely to rent out needs at least 20% down. CMHC can insure a two- to four-unit rental you don't live in, but still only up to 80% of the value and below a $1 million price, and a single-unit rental can't be insured at all.
The other big difference is how the rent is counted. Lenders either add part of the expected rent to your income or net it against the property's own costs, and that choice can change what you qualify for by a wide margin. In much of BC, provincial rules also affect what a rental can earn and what it costs to hold, so we check those before you write an offer.
What changes for investors
Down payment
20% or more if you won't live there. Living in one of the units changes the picture: 5% of the first $500,000 and 10% of the rest for a one- or two-unit home, or 10% for three or four units, with mortgage insurance.
Rental income
Some lenders add a share of the rent to your income; others subtract it from the property's mortgage payment and costs. The same rental can qualify with one lender and not another.
BC holding costs
The speculation and vacancy tax and the short-term rental rules reach most of the province's larger communities. A home left empty, or rented only by the night, can cost far more to hold than planned.
How it works
Before you make an offer
Decide how you will use it
A long-term rental, a multiplex you live in, or a place you will renovate first. Whether you live there decides the down payment and which lenders fit.
Run the rent through lender rules
We estimate a realistic rent for the area and show how each lender would count it, and what that does to your debt service ratios.
Check the local rules
Is the address in a speculation and vacancy tax area? Does the short-term rental principal residence requirement apply? Does the strata limit short-term rentals?
Arrange and review
We place the mortgage with the lender whose rental rules suit your plans, then look at a refinance or home equity line as your equity grows.
Frequently asked questions
You have questions — we have answers!
Investment Property Mortgages
Can I buy a rental property with 5% down?
Only if you will live in it. Insurance with less than 20% down needs one unit to be your home, so a two-unit home you live in can be bought with 5% of the first $500,000 and 10% of the rest, and a three- or four-unit property with 10%. If you won't live there, plan on at least 20% down.
How do lenders count rental income?
There are two main approaches. With an add-back, the lender adds a share of the rent to your income. With an offset, it subtracts the rent from the property's own payment and costs, and only the surplus or shortfall counts. CMHC, for example, allows up to 50% of gross rent or a net rental calculation for a rental you don't live in, and up to 100% of a suite's rent in a two-unit home you do. Uninsured lenders set their own rules.
What is the speculation and vacancy tax?
A yearly BC tax on residential property in 59 designated communities, mostly in the larger urban areas. Every owner there has to file a declaration by March 31, even if exempt. Living in the home, or renting it out for at least six months of the year, generally exempts you. For 2026 the rate is 1% of assessed value for Canadian citizens and permanent residents and 3% for foreign owners and satellite families, rising to 4% for them in 2027.
Can I rent my investment property short-term?
In much of BC, only if it is your own home. Under the Short-Term Rental Accommodations Act, in communities of 10,000 people or more and smaller ones within 15 km of them, short-term rentals are limited to the host's principal residence plus one secondary suite or laneway home on the same property. Some areas are exempt or have opted out, and local bylaws and strata bylaws can be stricter, so check the specific address.
Can I use the equity in my home to buy a rental?
Yes. A refinance or a home equity line on your current home can fund the down payment, as long as you qualify for both mortgages. A home equity line on its own can go up to 65% of your home's value, or up to 80% combined with a regular mortgage.
Today's rates
Our rates vs the banks'
We shop 50+ lenders, so the rate you're offered isn't limited to one bank's rate sheet. Updated Oct 8.
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Our job is to find you a competitive rate and terms that fit. Your rate qualification depends on certain factors, such as credit score and home equity, as per Canadian regulations. Get your details fast — there's no cost and no obligation.
- Current variable mortgage rate
- 3.70%
- Current prime rate
- 4.45%
| Term | Bank posted | Our rates | Action |
|---|---|---|---|
| 6 Months | 7.89% | 4.79% | Get this rate: 6 Months |
| 1 year fixed | 5.49% | 4.64% | Get this rate: 1 year fixed |
| 2 year fixed | 5.44% | 4.44% | Get this rate: 2 year fixed |
| 3 year fixed | 6.05% | 4.54% | Get this rate: 3 year fixed |
| 4 year fixed | 6.01% | 4.39% | Get this rate: 4 year fixed |
| 5 year fixed | 6.19% | 4.69% | Get this rate: 5 year fixed |
| 7 year fixed | 6.41% | 4.79% | Get this rate: 7 year fixed |
| 10 year fixed | 6.81% | 4.79% | Get this rate: 10 year fixed |
| 5 year variable | No bank rate | 3.70% | Get this rate: 5 year variable |
Bank posted rates are the big banks' posted rates published by the Bank of Canada (1, 3 and 5 years) and by Dominion Lending Centres (other terms). Some conditions may apply. Rates may vary from province to province. Rates subject to change without notice. Rates change often and depend on your down payment, credit and property; on approved credit (O.A.C.). E.&O.E.
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- Our location525 W 8th Ave #800, Vancouver, BC V5Z 1C6
- Phone number778-838-8005
- Email addressinfo@coastalblue.ca