🔑 What’s Changing

• No more double-counting rental income: Lenders can no longer use the same rental income stream to qualify a borrower across multiple properties. Each property’s income must stand on its own.
• Tighter treatment of income-producing real estate: If mortgage repayment depends heavily on rental income, lenders must classify the loan as “income-producing residential real estate,” which carries stricter approval standards.
• Short-term rental tax rules: The Canada Revenue Agency (CRA) will no longer allow expense deductions (including mortgage interest) for short-term rentals that are not licensed or permitted under local rules.

📉 What This Means for Small Rental Investors

• Qualifying may get harder: Expect lenders to reduce how much rental income counts toward approvals.
• Borrowing power may shrink: Multi-property investors will feel the impact most.
• Policies will vary by lender: Some lenders may take a stricter approach than others.
• Rates and terms may shift: Investment property mortgages could carry higher costs as banks hold more capital.

✅ What You Should Do Next

• Stay compliant: Ensure short-term rentals meet all local licensing rules.
• Keep your paperwork in order: Leases, tax returns, and rental income proof will be essential.
• Plan ahead: Talk with a broker early if you’re buying or refinancing a rental.
• Stay flexible: Be ready for lenders to adjust how they calculate rental income offsets.

💡 Bottom Line

You don’t need to act immediately — these changes are still being rolled out. But you should prepare now by keeping rental income documentation clean and understanding that qualifying standards will likely tighten.

At The Mortgage Advisors, we track every lender’s policy changes so that you don’t have to. Whether you’re buying your first rental property or expanding your portfolio, we’ll guide you to the best financing strategy.