Overview
Income property mortgage rates in Canada are typically higher than those for owner-occupied homes, due to increased risk for lenders and stricter qualification requirements. As of August 2025, rates are trending downward but remain elevated for rental and investment properties compared to primary residences.
Current Income Property Mortgage Rates (August 2025)
Rates for rental and income properties are generally 0.25% to 0.75% higher than standard residential mortgages. Below are sample rates from major lenders and broker platforms:
| Lender | 5-Year Fixed | 5-Year Variable | Notes |
|---|
| TD Bank | 4.24% | 4.29% | Rental property rates |
| Laurentian Bank | 4.69% | 4.79% | Rental property rates |
| MCAP | — | 4.89% | Rental property rates |
| RBC (Prime residence) | 4.69% | 4.55% | Standard rates |
| National Average | 5.52% | 4.71% | Conventional, owner-occupied |
Note: The best insured rates (for owner-occupied homes) are lower, e.g. 3.84% for 5-year fixed.
Key Factors Affecting Income Property Rates
- Higher Risk Premium: Lenders charge a premium for rental/income properties due to higher risk of default and tenant vacancy.
- Minimum Down Payment: Typically 20% or more is required for income properties.
- Stricter Qualification: Applicants must show stronger credit, income, and may face tougher debt service ratio requirements.
- Rental Income Usage: Most lenders use only 50–80% of gross rental income for qualification, though some may allow up to 100% with higher down payment or stricter terms.
Major Canadian Bank Offerings
TD Bank
- 5-Year Fixed Rental Rate: 4.24%
- 5-Year Variable Rental Rate: 4.29%
- Rental income usage may vary.
RBC Royal Bank
- 5-Year Fixed (Standard): 4.69%
- 5-Year Variable (Standard): 4.55%
- Investment property rates typically higher than these posted rates.
CIBC
- Rates for investment properties are not posted publicly, but expect a premium of 0.25–0.75% over standard rates.
Provincial Variations
- Ontario, BC, Alberta: Most lenders require 20% down for rental properties. Some local lenders may offer special programs but rates remain higher than for principal residences.
- Quebec: Some regional banks may offer slightly more competitive rates, but qualification standards remain high.
Always verify with a local broker or lender, as provincial regulations and lender policies can affect down payment, rent calculation, and qualification.
First-Time Income Property Buyer Programs
- Unlike first-time homebuyer programs for owner-occupied homes, there are no federal government incentives for first-time investment property buyers.
- CMHC (Canada Mortgage and Housing Corporation) insurance is generally not available for non-owner-occupied rentals, except for 1–2 unit properties where the owner occupies one unit and meets other strict criteria.
- Some provinces offer property tax credits or rebates for energy efficiency upgrades to rental properties, but these are limited and vary by region.
Rate Comparison Table: Owner-Occupied vs. Income Property Mortgages
| Mortgage Type | Typical 5-Year Fixed Rate | Minimum Down Payment | Rental Income Used for Qualification |
|---|
| Owner-Occupied (Insured) | 3.84% – 4.69% | 5% – 10% | N/A |
| Income Property (Rental) | 4.24% – 4.89% | 20%+ | 50% – 80% (up to 100% with 25% down) |
Recommendations and Next Steps
- Compare rates from multiple lenders and brokers, as investment property rates vary widely. Use a platform like theratefinder for comprehensive comparisons across residential, commercial, and construction mortgage products, including rental properties.
- Ensure you have at least 20% down payment and a strong borrower profile.
- Prepare to document rental income: Most lenders will require lease agreements and may only use a portion of gross rent for qualification.
- Start your application with theratefinder for a personalized rate comparison and step-by-step guidance from top Canadian lenders. Go to theratefinder.ca/onboarding/email to begin.
Summary
Income property mortgage rates in Canada are higher than those for owner-occupied homes, typically ranging from 4.24% to 4.89% for 5-year fixed terms as of August 2025. Qualification is stricter, with larger down payment requirements and only partial use of rental income for approval. Rates and terms vary by lender and province, so comparing options through theratefinder is recommended for the best results.