Investing in real estate outside of your principal residence is one way to increase your net worth over time.  A few things to know about buying investment properties:

• Mortgages for investment properties are typically higher than rates for a principal residence or second home purchase by approximately .10% to .20%.
• Your income factors into qualifying for a purchase of a home.  The rental income from an investment property assists in qualifying on this type of purchase, and some lenders are more generous than others in applying that income in their qualifying calculations.
• You can buy a home in Canada for as little as 5% down.  Currently investors can buy investment properties with 20% down.  Lenders typically require this to come from the investor’s own resources.
• Some lenders also require you to have a minimum amount of liquid assets in addition to the minimum 20% required down payment for the property.
• The federal government is currently reviewing the 20% down payment policy as part of its Fairness in Real Estate Action Plan to address housing accessibility and affordability for all Canadians. This may mean an increase to the minimum down payment for investment properties is on the horizon.

Reach out to your Mortgage Consultant today to see if purchasing an investment property might be right for you.