Investment (non-owner-occupied)


RENTAL ADVANTAGE™

Purchasing real estate can be a sensible investment. The Rental Advantage product allows qualified borrowers to purchase residential investment properties with a minimum 20% down payment.

 

 

Transaction Types

  • Purchase transactions.
  • Purchase Advantage Plus™ eligible.
  • Portable eligible.

 

Credit Score Requirements

  • Strong credit profile required.

 

Amortization

  • Maximum 25 years.

 

Loan-to-Value Criteria

  • Maximum 80% LTV for Purchase.

 

Interest Rate Types

  • Fixed, standard variable, capped variable and adjustable rate mortgages permitted.
  • Borrower(s) must qualify at an interest rate that is the greater of the contract mortgage rate or the five-year benchmark rate.

 

Property Types

  • Maximum property value must be less than $1,000,000.
  • Maximum 2-4 units only. Single unit properties ineligible.
  • Resale or new construction (single advance).
  • Restricted to residential units (no commercial properties).
  • Maximum loan amount in the Greater Toronto Area, Greater Vancouver Area and Greater Calgary Area is $750,000. For all other locations, a maximum loan amount of $600,000 is applicable. Exceptions will be considered on a case-by-case basis.

 

Borrower Qualifications

  • Down payment must be from borrower’s own resources.
  • Maximum debt service ratios: GDS 39% / TDS 40%
  • Minimum personal net worth of $100,000.
  • Personal guarantees are required when the borrower is a corporate entity.

Rental income must be confirmed with at least one of the following documents:

  • T1 Generals
  • Lease Agreements
  • Fair Market Rents from an accredited appraiser approved by Canada Guaranty
  • Bank Statements showing a 12-month history confirming rental income has been received

 

Rental Income Calculation

  • 50% of the gross annual rental income may be added to the borrower’s gross annual income for debt servicing purposes.

 

Portability Options

1. Port from Rental Advantage to Rental Advantage

The premium will be the lesser of:

  • The increase in the loan amount multiplied by the applicable Rental top-up premium rate, outlined below.

OR

  • The new loan amount multiplied by the full Rental premium rate.

2. Port from Rental Advantage to Standard Canada Guaranty-insured Loan

The premium will be the lesser of:

  • The increase in the loan amount multiplied by our standard top-up premium rates as described in the Portable Advantage™ product sheet.*

OR

  • The new loan amount multiplied by the full Rental premium rate.

3. Port from Standard Canada Guaranty-insured Loan to Rental Advantage

The premium will be the lesser of:

  • The outstanding mortgage balance multiplied by 0.50% plus the top-up amount multiplied by the Rental top-up premium rate.

OR

  • The new loan amount multiplied by the full Rental premium rate.
*Please see the Portable AdvantageTM product sheet for details regarding standard premium rates and the Borrower Loyalty Program.

 

Documentation Requirements

  • Standard documentation.
  • Agreement of Purchase and Sale.
  • Equity and asset confirmation.
  • Rental income documentation. (Please refer to Borrower Qualifications.)
  • Appraisal ordered by Canada Guaranty for each application.
NOTE: Documents may be requested for review on a case-by-case basis.

 

Applicable Premiums

Loan-to-Value Ratio Single Premium Top-Up Premium
≤ 65%1.45%3.15%
65.01%–75%2.00%3.45%
75.01%–80%2.90%4.30%
NOTE: Mortgage Insurance premiums are non-refundable.

 


Last Updated: 03/17/2017

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