The multi-unit mortgage loan

Mortgage financing is usually granted when the borrower wishes to acquire a multi-unit building. When the property consists of 2 to 5 units, the multi-unit mortgage loan will be regarded as a residential loan. When the property consists of 6 units or more, the multi-unit mortgage loan will be regarded as a commercial loan. In both cases, the landlord can be an occupant or non-occupant owner, depending on whether or not he lives in the building. The amount required for the down payment will vary according to these two types of ownership.

Down payments required

  • 5%: Minimum down payment for the purchase of a duplex (occupant owner only), 2 units.
  • 10%: Minimum down payment for the purchase of a triplex and quadruplex (occupant owner only), 3 to 4 units.
  • 15%: Minimum down payment for the purchase of a 5 unit building in which you are a non-occupant owner.

Who can invest in a multi-unit property?

If you think of yourself as a manager and are comfortable with having tenants, this could be an exciting time for you. The interest rates are low and help improve the profitability of multi-unit properties. Additionally, vacancy rates remain stable in the greater Montreal region at below 3%. The lower the vacancy rate, the better are the chances for an investor to rent his units and make his building even more profitable.

How to secure a multi-unit mortgage loan

The location, the purchase price, the quality of the multi-unit building and its financing are at the heart of a real estate investment. This form of investment, which is attractive and highly profitable, requires the investor to be comfortable with the risks associated with this type of investment, and be able to manage tenants. A mortgage consultant will boost your chances of getting the mortgage loan required for the purchase of the building. According to your financial profile, the mortgage broker will submit your request to a financial institution which is more likely to approve it.

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