How do investment mortgage loans work?
Investment mortgage loans in Canada are specifically designed for purchasing or refinancing property that will be used as an investment, such as rental properties or commercial real estate.
There are several types of investment mortgage loans:
- Rental property mortgages is used to purchase residential properties that will be rented out to tenants.
- Commercial real estate mortgages are desined for purchasing or refinancing commercial properties such as office buildings, retail spaces, or industrial properties.
- Vacation property mortgages are developed to buy properties that are not used as primary residences but for personal use or as a short-term rental.
Residential investment properties typically requires a down payment of at least 20% of the property’s purchase price. Commercial Properties generally requires a down payment of 25% to 35% of the property’s purchase price.
Interest rates for investment mortgages are usually higher than those for owner-occupied properties due to the increased risk for lenders. You can choose between fixed-rate or variable-rate mortgages, depending on your preference and market conditions.
Residential investment properties usually offer amortization periods of up to 25 years. Commercial properties often have shorter amortization periods, ranging from 15 to 20 years.
Lenders will assess your ability to repay the loan based on rental income projections and your personal financial situation. A good credit score is important for securing favorable terms on an investment mortgage.
Home loan calculations for 20 years (example)
| Amount, $ | Rate, % | Accrued %, $ |
| 400,000 | 4.55% | 183,517 |
| 400,000 | 4.55% | 183,517 |
| 400,000 | 4.55% | 183,517 |
| 500,000 | 5.05% | 254,604 |
| 500,000 | 5.05% | 254,604 |
| 500,000 | 5.05% | 254,604 |
| 600,000 | 5.55% | 335,775 |
| 600,000 | 5.55% | 335,775 |
| 600,000 | 5.55% | 335,775 |
| 700,000 | 6.05% | 427,029 |
| 700,000 | 6.05% | 427,029 |
| 700,000 | 6.05% | 427,029 |
Who offers the best investment mortgage loans?
Finding the best investment mortgage loans in Canada involves comparing various lenders based on their loan products, interest rates, terms, and additional features.
Here’s a list of some of the top providers and their offerings for investment mortgage loans:
- Big Banks (RBC Royal Bank, TD Canada Trust, Scotiabank, BMO Bank of Montreal)
- Credit Unions (Vancity Credit Union, Meridian Credit Union)
- Online Lenders and Mortgage Brokers (Ratehub.ca, Mortgage Architects)
- Specialized Lenders (First National Financial, Equitable Bank)
You can also see the similar FAQ about:
- BMO calculators
- BMO cashback mortgage proposals
- BMO pre-approved mortgage
- BMO rates
- CIBC home insurance
Details of companies offering the financial services:
Industrial Alliance Insurance & Financial Services
Web-site: https://ia.ca/
Manulife Bank of Canada
Head office’s address: 500 King Street North Waterloo
Phone: 877-765-2265
Mail address: Manulife Bank of Canada 500 King Street North Suite 500-MA P.O. Box 1602 STN Waterloo Waterloo, ON N2J 4C6
Web-site: http://www.manulifebank.ca/
Swift code: MCBTCA2W
BSB: 540
RBC Royal Bank
Head office’s address: 200 Bay St, 9th Floor South Tower, Toronto
Contact center: 800-769-2511
Web-site: http://www.rbc.com/canada.html
Swift code: ROYCCAT2
Stock code: RY
BSB: 003
True North Mortgage
Web-site: https://www.truenorthmortgage.ca/