No, you are going to need at least a twenty percent down payment if you want to purchase an investment property. Not many of us have that kind of money sitting in savings accounts though.
If you are already a homeowner, chances are you have enjoyed some pretty healthy growth in the value of your home in the past year or two. You can consider tapping into this home equity and sourcing the rental property down payment there.
The reality is most such homes around the GTA do not come with legal, conforming rental units, retrofitted to the Fire Code. As such, their income potential is irrelevant to your mortgage lender. It’s different if you have are buying a legal duplex, triplex or quadplex, so be sure you ask your real estate agent whether or not the property you wish to be confirms to code.
When it comes to rental properties some lenders factor in so many variables, we need all our fingers and toes to figure out all the possibilities. But to answer your question, no, the mortgage interest rate on a rental property will typically be a touch higher. For example:
Related Article: How to choose a rental (investment) property
Related Article: Top ten reasons to refinance your Toronto mortgage
Saving money has to be treated like a regular monthly expense – no less important than your rent, mortgage or car payment. The “Richest Man in Babylon” argued for 10% of your income – think bigger!