Investment Property Mortgages in Calgary
Most lenders want at least 20% down on a rental you won't live in. On CREB's August benchmarks that's $59,080 on a $295,400 Calgary apartment and $83,040 on a $415,200 row home. Alberta has no land transfer tax and no cap on rent increases, and apartments sat at nearly 6 months of supply in August, so buyers have room to negotiate on price while rent growth is limited by competition from other units.
How much down payment do I need for a rental property in Calgary?
Plan on 20% of the price at most lenders, plus Alberta land titles fees on the transfer and the mortgage. These are the numbers on each Calgary benchmark.
| Home type (August benchmark) | Price | 20% down | Transfer fee | Mortgage registration fee |
|---|---|---|---|---|
| Apartment | $295,400 | $59,080 | $350 | $290 |
| Row home | $415,200 | $83,040 | $470 | $385 |
| Semi-detached | $690,500 | $138,100 | $745 | $605 |
| Detached | $744,300 | $148,860 | $795 | $650 |
If you'll live in one of the units, different rules apply and the down payment can be lower, so tell us your plan before we run the numbers.
How do lenders count rental income in Alberta?
Lenders use one of 2 methods. Some add a share of the rent to your income. Others subtract the rent from the property's own costs, and only the shortfall, if any, counts against you. The method changes how much you qualify for far more than the rate does.
On a first rental either method usually works. By the third or fourth property, the offset method at the right lender can be the difference between an approval and a decline, so we pick lenders by method as your portfolio grows.
How many rental properties can I finance in Canada?
No law sets a limit. Each lender sets its own, and many big banks cap the number of properties or the total amount they'll lend to one borrower, while other lenders look at each property on its own numbers.
The order you use lenders in matters. Place early properties with lenders that cap you, and keep the more flexible lenders for later purchases, because moving a mortgage to make room means waiting for maturity or paying a penalty. Plan the next 3 purchases before you finance the first.
What do Alberta's rental rules mean for my numbers?
Alberta landlords can raise rent once every 365 days, with at least 3 months' written notice on a monthly tenancy, and the Residential Tenancies Act sets no cap on the amount. The law lets rent follow the market in both directions.
With close to 6 months of apartment supply in Calgary, tenants have choices, and that limits how far rents can move. Build your cash flow on today's rent for a comparable unit, and treat any increase as a bonus. Run your numbers through the deal analyzer before you make an offer.
Should I buy a Calgary apartment or a row home as a rental?
An apartment is the cheapest way in and faces the most competition, and a row home costs more up front and has had a steadier price. CREB's apartment benchmark fell 8% in a year with close to 6 months of supply, while row homes fell 5% with about 4 months.
Condo fees come straight off your cash flow, and a special assessment can wipe out a year of profit, so read the condo's reserve fund study and recent board minutes before you firm up. A lower fee can matter more to a rental's numbers than a lower price. If 2 units rent for about the same, the one with the lower fee and the healthier reserve fund usually carries better, and lenders count part of the fee when they qualify you.
What is MLI Select, and does it work for Calgary multi-family?
MLI Select is a Canada Mortgage and Housing Corporation (CMHC) program for properties of 5 or more units. You earn points for affordability, energy efficiency and accessibility, and more points allow more borrowing and longer amortizations.
| Points | Maximum financing | Amortization | Recourse |
|---|---|---|---|
| 50 | Up to 95% of cost | 40 years | Full recourse |
| 70 | Up to 95% | 45 years | Full recourse |
| 100 | Up to 95% | 50 years | Limited recourse |
The affordability points come from keeping a share of units at rents set at 30% of the local median renter income for at least 10 years, and the property has to cover its debt by at least 1.1 times. It suits an investor who will hold for a decade and can live with rent limits on part of the building.
Frequently asked questions
What's the minimum down payment on a Calgary rental condo?
- At most lenders, 20%. On CREB's August apartment benchmark of $295,400, that's $59,080, plus about $640 in Alberta land titles fees for the transfer and mortgage.
Is there a limit on how many mortgages I can have?
- No legal limit. Each lender sets its own cap, and many banks stop at a set number of properties or a total exposure. Other lenders judge each property separately.
Can I use equity in my home to buy a Calgary rental?
- Yes. Many investors use a HELOC or refinance on their home for the down payment. The interest can be deductible when the money is used to earn rental income. Confirm with your accountant.
Is there rent control in Alberta?
- No. Alberta limits how often rent can rise, once every 365 days with at least 3 months' notice on a monthly tenancy, and sets no limit on the amount.
Does MLI Select work for a fourplex?
- No. MLI Select needs at least 5 units. A property of 1 to 4 units is financed with a residential mortgage.