1. Return on investment. Certainly, residential real estate is a solid long-term investment, typically appreciating faster than inflation. Even Canadians who have chosen their stock portfolio very carefully may find that their home is their best-performing investment. Many investment advisors recommend diversifying stock and bond portfolios to include real estate. Initially the goal is to have rental income cover all or most of the costs of the property. Over time the goal is to see an increase in the value of the real estate, with rent turning to profit once the mortgage is paid off. Expenses related to the property are of course tax deductible, offsetting the rental income.
2. A pension plan for the future.Over the long term, an investment property or multiple real estate
   holdings can be a great source of retirement funds. Many Canadians do not have a pension plan, which means they need to take their own action to create sources of retirement income.
3. A better alternative to student residence. Many Canadians are shipping off their university-age children, and housing them in an investment property purchased specifically for that purpose. They can save money on out-of-town accommodations for the student, and use revenue from other renting students to pay the mortgage and maintenance expenses.
4. Earlier access to a first home. For first-time home-buyers, a duplex or triplex can be a terrific way to get onto the home ownership ladder. Rental income from the extra units can help offset the cost of the mortgage as the new homeowners get on their financial feet.

Rules have changed however for investment property mortgages since the government’s new mortgage rules that came into effect April 19, 2010. A minimum downpayment of 20% is required for an investment property i.e. you’re not personally living in the property that you own, which is up from 5% prior to the new rules. You can put down less than 20%, but you’ll need to use an uninsured lender, which can mean higher interest rates. If you only have one to four properties, there are several Canada Mortgage & Housing Corporation (CMHC) lenders from which to choose from. Once you have more than four properties you need to start spreading out your business among several lenders so as to not reach the maximum number of mortgages a lender will approve per investor.

Other underwriting or qualifying rules have also come into play; CMHC, Canada’s largest mortgage insurer, has changed the way they treat rental income in their debt service calculation, which can make qualifying more difficult.

Sound confusing? It absolutely is. That’s why you need to speak with an experienced mortgage planner who can help you better understand what’s involved in financing investment properties. There’s no cost or obligation. We’re up-to-date on current rates and all of the opportunities available for property investors from all of the lenders in the marketplace. Whether you need an investment property mortgage or just looking for some advice, a mortgage broker is ready to help!

1. Return on investment. Certainly, residential real estate is a solid long-term investment, typically appreciating faster than inflation. Even Canadians who have chosen their stock portfolio very carefully may find that their home is their best-performing investment. Many investment advisors recommend diversifying stock and bond portfolios to include real estate. Initially the goal is to have rental income cover all or most of the costs of the property. Over time the goal is to see an increase in the value of the real estate, with rent turning to profit once the mortgage is paid off. Expenses related to the property are of course tax deductible, offsetting the rental income.
2. A pension plan for the future.Over the long term, an investment property or multiple real estate
   holdings can be a great source of retirement funds. Many Canadians do not have a pension plan, which means they need to take their own action to create sources of retirement income.
3. A better alternative to student residence. Many Canadians are shipping off their university-age children, and housing them in an investment property purchased specifically for that purpose. They can save money on out-of-town accommodations for the student, and use revenue from other renting students to pay the mortgage and maintenance expenses.
4. Earlier access to a first home. For first-time home-buyers, a duplex or triplex can be a terrific way to get onto the home ownership ladder. Rental income from the extra units can help offset the cost of the mortgage as the new homeowners get on their financial feet.

Rules have changed however for investment property mortgages since the government’s new mortgage rules that came into effect April 19, 2010. A minimum downpayment of 20% is required for an investment property i.e. you’re not personally living in the property that you own, which is up from 5% prior to the new rules. You can put down less than 20%, but you’ll need to use an uninsured lender, which can mean higher interest rates. If you only have one to four properties, there are several Canada Mortgage & Housing Corporation (CMHC) lenders from which to choose from. Once you have more than four properties you need to start spreading out your business among several lenders so as to not reach the maximum number of mortgages a lender will approve per investor.

Other underwriting or qualifying rules have also come into play; CMHC, Canada’s largest mortgage insurer, has changed the way they treat rental income in their debt service calculation, which can make qualifying more difficult.

Sound confusing? It absolutely is. That’s why you need to speak with an experienced mortgage planner who can help you better understand what’s involved in financing investment properties. There’s no cost or obligation. We’re up-to-date on current rates and all of the opportunities available for property investors from all of the lenders in the marketplace. Whether you need an investment property mortgage or just looking for some advice, a mortgage broker is ready to help!

With mortgage rates still at historic lows, this spring you have an incredible window of opportunity. By using your home equity, you can consolidate your high-interest debt into a new or existing mortgage, giving you interest savings and a new lower monthly payment. In almost every case, you’re better off holding your debt in a mortgage than in any other lending vehicle. Why? Because we continue to benefit from mortgage rates that are still among the lowest in decades.

Worried about penalties to break your current mortgage? We can assess your situation; there’s a good chance that the savings each month will far outweigh any penalties. Here’s an example.

Consider the following situation:

• your current mortgage is $155,000 at 5.5% with a monthly payment of $946
• you also have a car loan of $20,000 and credit cards maxed out at $20,000, both of which cost you $920 a month
• your total monthly payment is $1,866

Your mortgage planner presents the following scenario:

• you get a new mortgage for $202,000 to cover the original $155,000, the $40,000 in credit cards and car loan, and $7,000 to break your mortgage
• your new mortgage is at 4.10% and you now have a much lower overall monthly payment of $1,074

With this new scenario, monthly payments are $792 less each month; a great improvement in cash flow! And if you put $425 of that cash flow into your mortgage payment, you reduce your amortization from 25 years to 15. We’re a fortunate generation of homeowners. We can benefit from low mortgage rates to enjoy our lives and our homes – and to manage our debt wisely.

Independent mortgage planners — who have access to more than 50 different lenders, including most of the major banks — have become specialists in helping Canadians restructure debt. In addition to offering access to a broad range of mortgage options, these experienced planners provide credit advice and debt management tips that can help save thousands of dollars.

Consider if you need a clear and simple look at what you’ve got to gain from spring cleaning your debt. We don’t know how long these great rates will last but right now, it is a historic opportunity. If too much debt has slowed your monthly cash flow to a trickle, it’s time to talk to a mortgage planner. And why not? It will be the easiest spring cleaning task on your list; your mortgage planner will do all the work!