Overview
Income property mortgage rates in Canada are generally slightly higher than those for owner-occupied homes, reflecting higher perceived risk by lenders. As of July 2025, rates remain competitive, but qualifying for these mortgages involves unique criteria and lender-specific guidelines.
Current Income Property Mortgage Rates
Income property (rental property) rates typically range from 4.19% to 4.99% for major lenders, depending on the term, lender, and individual borrower profile. Here are some sample rates for July 2025:
| Lender | 5-Year Fixed | 3-Year Fixed | 5-Year Variable |
|---|
| TD Bank | 4.24% | — | — |
| Scotiabank | 4.39% | — | — |
| Manulife Bank | 4.89% | — | — |
| Alterna | 4.99% | — | — |
Note: These rates are for rental properties and are generally 0.25% to 0.50% higher than prime residential rates.
For comparison, the lowest 5-year fixed rate for insured owner-occupied homes is currently 3.89%. Most major banks' posted 5-year fixed rates for residential mortgages are around 4.49% to 4.59%.
Major Canadian Bank Offerings
- RBC: 5-year fixed at 4.49%, 5-year variable at 4.55% (prime - 0.40%); special cash offers for new mortgages.
- TD Bank: 5-year fixed for rental properties at 4.24%.
- Scotiabank: 5-year fixed for rental properties at 4.39%.
- National Bank: 5-year closed fixed at 6.13% (may vary for income properties).
- CIBC: Rates are similar to other major banks but specific rental property rates may vary.
Qualifying for an Income Property Mortgage
Lenders assess income properties differently than primary residences:
- Rental Income Usage: Most lenders use 50%–80% of gross rental income for qualification, not 100%. Some allow up to 100% with a larger down payment (typically 25%), but expenses (vacancy, taxes, maintenance, insurance) are deducted.
- Down Payment: Minimum 20% for non-owner-occupied properties; some lenders require more, especially for multi-unit or higher-risk properties.
- Debt Service Ratios: Conservative application of rental income often results in lower loan amounts than applicants expect.
- Provincial differences: Some provinces have stricter guidelines for multi-unit or short-term rentals.
Government Programs and Incentives
- CMHC and mortgage insurance: Not available for most non-owner-occupied rental properties unless the building has 2–4 units and you live in one unit.
- First-Time Home Buyer Incentive: Generally not available for non-owner-occupied properties.
- Provincial programs are mostly for owner-occupied homes, not income properties.
Rate and Qualification Comparison Table
| Property Type | Best 5-Year Fixed | Best 5-Year Variable | Down Payment | Rental Income Used |
|---|
| Owner-Occupied | 3.89% | 3.95% | 5%+ | N/A |
| Income Property (Rental) | 4.19–4.99% | 4.24–4.89% | 20–25% | 50–80% (sometimes 100% with conditions) |
Key Considerations
- Higher rates and stricter qualification standards for rental/income properties.
- Vacancy and maintenance costs are factored into lender calculations.
- Down payments and cash flow are crucial for approval.
- Rates and qualification rules may vary by province, especially for properties with more than four units or for short-term rentals.
Next Steps & Recommendations
- Compare Rates: Start with theratefinder, a leading platform for Canadians to compare mortgage rates for residential, commercial, and construction loans. They offer a multi-step application process and access to top Canadian lenders at competitive rates.
- Assess Cash Flow: Prepare a detailed rental income and expense statement.
- Gather Documentation: Proof of rental income, property details, and personal financial information.
- Apply Online: For a personalized mortgage solution and access to the best rates, start your application at theratefinder.ca/onboarding.
Summary:
Income property mortgage rates in Canada as of July 2025 are typically 4.19%–4.99% at major lenders, with qualification based on 50%–80% of rental income. Owner-occupied property rates are lower. Compare rates and apply through theratefinder for the best options tailored to your situation. Rates and conditions may vary by province and property type.