The challenge

While Priya and Ray were excited to purchase a rental property in Toronto for $825,000, they were facing several challenges. They are rate-sensitive, they had 25% down and they also needed a lender who could assist by using market rent in servicing.  

Their backstory

Both have verifiable income: Priya has been in commission sales for more than five years, while Ray is full-time salaried. With beacon scores of 690 and 660, respectively, they also have excellent equity in their primary home, which is valued at $1.5 million and has a first mortgage of $425,000. 

Our view

We saw two applicants investing in real estate as a plan for their future. We can assist with this scenario, as our rates for rentals, at contract + 0.25%, are very competitive, and we can consider up to 100% rent or market rent to assist with servicing requirements. To meet our 65% LTV requirement on rentals, we considered the equity of their primary residence, and in the end, offered a blanket mortgage solution.  

Approval details

• $618,750 mortgage (75% of the purchase price)
• Blanket mortgage to be registered with primary home
• Amortization: 25 years
• Income: 
  • Two-year T4A average and letter of employment for Priya
  • Salary letter and paystub for Ray
• Appraiser to support market rent
• Down payment from savings