Down payment · CMHC · rental income · stress test
Financing a Calgary Investment Property
A Calgary rental you won't live in needs at least 20% down: $143,700 on a median detached house. If you live in one unit of a 2-unit home, the owner-occupied minimum ($46,850) applies with mortgage insurance, and CMHC lets up to 100% of the suite's gross rent count toward qualifying. Either way, the stress test applies.
How much down payment does a rental need?
| Situation | Minimum down | Insurable? |
|---|---|---|
| You live in it, 1–2 units | 5% of the first $500,000 + 10% of the rest (20% at $1.5M+) | Yes (owner-occupied) |
| You live in it, 3–4 units | 10% | Yes (owner-occupied) |
| You don't live in it, 1–4 units | 20% (maximum 80% loan-to-value) | Small rental loans, 2–4 units, under $1M |
Source: CMHC, Homeowner mortgage loan insurance: Purchase (eligibility). Checked . Source: CMHC, Homeowner and small rental loan insurance (2–4 units; non-owner-occupied max 80% LTV). Checked .
How does rent count when you qualify?
For an owner-occupied 2-unit home, CMHC allows up to 100% of the second unit's gross rent in qualifying; for 3–4 units, 50% of gross or net. Lenders choose how they apply it (added to income or offset against the payment), so the same file can qualify differently at two lenders. Source: CMHC, Rental income in qualifying (2-unit owner-occupied: up to 100% of gross rent), effective May 22, 2024. Checked .
Does the stress test apply to rentals?
Uninsured mortgages from federally regulated lenders are qualified at the greater of the contract rate plus 2 points or 5.25%; insured mortgages use the same test. At 4.58%, that's 6.58%. Source: OSFI, Minimum qualifying rate for uninsured mortgages (Guideline B-20). Checked . See MortgageStressTestCalculator.ca for a full check.
What DSCR do lenders look for?
The debt service coverage ratio is net operating income divided by the mortgage payment. Below 1.0, the property's income doesn't cover its mortgage. Our rental calculator shows it for every scenario, along with the rent at which cash flow is zero.
What are three ways to finance the same house?
The median detached house ($718,500), financed three ways:
| Path | Down payment | Example rate | What decides approval |
|---|---|---|---|
| Live upstairs, rent the suite (insured) | $46,850 | 4.12% | Income of about $136,993 with the suite's rent counted |
| Live in it, no suite (insured) | $46,850 | 4.12% | Income of about $155,977 |
| Rental you won't live in | $143,700 | 4.58% | Your income and debts, plus the rent (DSCR 0.48 at $2,470) |
The owner-occupied paths need a fraction of the cash and get the insured rate; the suite is what turns them into an investment. A pure rental needs four times the down payment and is priced as uninsured, which is why many Calgary investors start by living in their first rental. Lenders' own rental policies vary (offset vs add-back, the share of rent they count); ask before you write an offer.
Every path is stress-tested. At the 4.58% example rate a rental is qualified at 6.58%, where the median house's payment would be $3,878 a month instead of $3,207. Lenders then apply their own debt-service rules to your whole portfolio, so a second or third rental gets harder to finance even when each property covers its own mortgage. Keeping each property's DSCR above 1.0, and a cash reserve of a few months' payments, is what keeps the next approval possible.
How much cash does each path need on day one?
| Path | Down payment | Closing costs (example) | Cash needed |
|---|---|---|---|
| Live in it (with or without a suite), insured | $46,850 | $2,350 | $49,200 |
| Rental you won't live in | $143,700 | $3,745 | $147,445 |
The gap is about $98,245: the main reason a first rental is so often a home you live in first. The insured path adds a CMHC premium to the loan instead of asking for cash, and the lender tests the payment at the qualifying rate either way.
What happens at renewal on a rental?
The rate in this guide is held for five years; the balance is what you renew at whatever the market offers then. On the median rental's $574,800 loan at 4.58%, every percentage point at renewal moves the payment by roughly $328 a month on the original balance. Renewing with the same lender doesn't require a new stress test; switching lenders on an uninsured straight switch has also been exempt since November 21, 2024. Building a cash reserve of a few months' payments before renewal is what protects a rental that only just covers its costs.
How does DSCR change with the rate?
| Rate | Payment | DSCR | Cash flow |
|---|---|---|---|
| 3.50% | $2,870 | 0.53 | -$1,343 |
| 4.00% | $3,024 | 0.50 | -$1,497 |
| 4.50% | $3,181 | 0.48 | -$1,655 |
| 5.00% | $3,343 | 0.46 | -$1,817 |
| 5.50% | $3,509 | 0.44 | -$1,982 |
On a single rental at the median price, no realistic rate gets DSCR to 1.0: the rent simply doesn't cover a 20%-down mortgage. That changes the conversation with a lender. They will lean on your income and other debts, and a lender that uses DSCR-based rental programs will want more down payment. Use the rate table on the left of the rental calculator with your own rent to see where your deal stands.
Which rates did Alberta lenders publish for rentals?
From the MITEY network's shared lender-rate dataset, read off each lender's own rates page, beside the Bank of Canada averages, with the payment on the median rental's $574,800 loan over 25 years:
| Rate | Source | Payment |
|---|---|---|
| 4.58% | Bank of Canada average, new uninsured 5-year fixed (2026-08) | $3,207 |
| 4.59% | Lowest collected uninsured 5-year fixed: 4.59% (ATB Financial, collected Nov 1, 2026) | $3,210 |
| 3.95% | Lowest collected uninsured 5-year variable: 3.95% (Lakeland Credit Union, collected Nov 1, 2026) | $3,008 |
Published rates are what each lender's page showed on the date given, not offers; rental and investment-property rates are often quoted case by case and can sit above the posted specials. Prime is 4.70% (in effect since October 29, 2026: the Bank of Canada's 2.50% policy rate plus the usual 2.20-point spread; the Bank's weekly prime series hasn't printed it yet).
How does it work on a real example?
The median detached house as a rental with 20% down, at the Bank of Canada average and at the lowest 5-year rates lenders publish for Alberta borrowers.
| Price and down payment | $718,500, $143,700 down |
|---|---|
| Rent | $2,470 |
| Bank of Canada average, new uninsured 5-year fixed: 4.58% | -$1,681 a month2026-08 |
| Lowest collected Alberta uninsured 5-year fixed: 4.59% | -$1,684 a month4.59% (ATB Financial, collected Nov 1, 2026) |
| Lowest collected Alberta uninsured 5-year variable: 3.95% | -$1,482 a month3.95% (Lakeland Credit Union, collected Nov 1, 2026); prime is 4.70% |
| Best cash flow today | -$1,482 a month$199 better than at the Bank of Canada average; a variable rate moves with prime |
Open this example in the calculator →Collected rates are what each lender's page showed on the date given, not offers. Source: ATB Financial, Mortgage rates page. Checked . Source: Lakeland Credit Union, Mortgage rates page. Checked .
What this means for you
- Living in one unit changes everything: 5% down instead of 20%, an insured rate, and the suite's rent counted in qualifying.
- Shop the rate: on a rental, a quarter point is worth about $81 a month on the median house.
- Expect the stress test at your rate plus 2 points (minimum 5.25%) on purchases and refinances.
What do the terms in this guide mean?
- Owner-occupied
- You (or, for some products, a close relative) live in one of the units; it unlocks insured financing below 20% down.
- Rental offset vs add-back
- Two ways lenders count rent: subtract it from housing costs, or add it to income. CMHC lets up to 100% of a 2-unit home's suite rent be added to income.
- Prime rate
- The rate variable mortgages are priced from: 4.70% (in effect since October 29, 2026: the Bank of Canada's 2.50% policy rate plus the usual 2.20-point spread; the Bank's weekly prime series hasn't printed it yet).
Frequently asked questions
Can I buy a rental property in Calgary with 5% down?
Only if you live in it (one unit of a 1–2 unit home). A property you won't occupy needs at least 20% down.
Does suite rent count toward my mortgage application?
For a 2-unit owner-occupied home, CMHC allows up to 100% of the gross suite rent; lenders decide how to apply it.
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Sources
- CMHC — Homeowner mortgage loan insurance: Purchase (eligibility). Checked .
- CMHC — Homeowner and small rental loan insurance (2–4 units; non-owner-occupied max 80% LTV). Checked .
- CMHC — Rental income in qualifying (2-unit owner-occupied: up to 100% of gross rent) (effective May 22, 2024). Checked .
- OSFI — Minimum qualifying rate for uninsured mortgages (Guideline B-20). Checked .