The short answer
The rules by building size (CMHC, insured loan)
| Building | Owner-occupied | Minimum down payment | Maximum loan |
|---|---|---|---|
| 1 or 2 units | Yes | 5% of the first $500,000 + 10% of the rest | 95% |
| 3 or 4 units | Yes | 10% | 90% |
| 2 to 4 units | No (rental) | 20% | 80% |
| 5 units and over | — | Depends on the lender | Depends on the lender |
Other limits for an occupant: price or value under $1,500,000, 25-year amortization, debt ratios of 39% (gross) and 44% (total). For a rental building with no occupant, the price ceiling is $1,000,000.
How rents count
The lender adds part of the rents to your income, or offsets them against your costs. The share used and the method vary by lender: you confirm it in the file, not in a table.
An example: a $700,000 triplex
Frequently asked questions
Do I have to live in the building?
For the lowest rates and down payments, yes. A fully rented building is financed with 20% down or more.
Is a five-unit building residential?
It is financed differently: it leaves CMHC’s small-building program (1 to 4 units). The lender analyzes the building and its income.
Are the current rents enough?
The lender looks at the leases, the history and the market. A vacant unit or one under market rent may be adjusted.