Down Payment for a Rental Property in Canada: The Owner-Occupied Advantage
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In brief — Owner-occupied: 5% for a duplex (10% above 500,000 dollars) and 10% for a triplex or fourplex. Investors pay 20%. Above four units it becomes commercial financing at 25% or more.
A small multi-unit property (duplex, triplex, fourplex) is the classic entry point into Canadian real estate investing. How much you put down depends on the number of units and whether you live in it. These are federal (CMHC-insured) rules; only closing costs vary by province.
Minimum down payment
| Property | Owner-occupied | Investor (non-occupant) |
|---|---|---|
| Duplex (2 units) | 5% (10% on the portion above $500,000) | 20% |
| Triplex / Fourplex (3–4 units) | 10% | 20% |
| 5+ units | Commercial financing: 25%+ | 25%+ |
Reduced owner-occupied rates assume an insured mortgage (CMHC, Sagen, Canada Guaranty). Living in one unit is the difference between starting at 5–10% and 20% — usually the most accessible path in.
Qualifying
Lenders count part of the rental income, boosting your borrowing power versus a single-family home. You will also face the stress test (qualifying at a higher rate): make sure the numbers hold if rates rise at renewal. The full calculation is explained in the borrowing power and B-20 stress test guide.
Closing costs to budget
Beyond the down payment: land transfer tax (varies by province — Ontario LTT + Toronto MLTT, BC PTT, none in Alberta; see your province guide), legal fees, home inspection, appraisal, and insurance. These do not get financed by the mortgage.
Judge profitability before you offer
Look at cap rate, cashflow, cash-on-cash and the gross rent multiplier, with all expenses in (taxes, 3–5% vacancy/maintenance, management). DeedWorth computes these plus the tax picture before you make an offer. Analyze a property with DeedWorth →
FAQ
What is the minimum down payment for a rental in Canada? Owner-occupied: 5% for a duplex (10% above 500,000 dollars) and 10% for a triplex or fourplex. Investors pay 20%. Above four units it becomes commercial financing at 25% or more.
Is it better to buy owner-occupied or as an investor? For a first purchase, owner-occupied status gives a much lower down payment, 5 to 10% versus 20%, and better terms. It is usually the most accessible route.
What closing costs should I budget beyond the down payment? Land transfer tax, legal fees, inspection, appraisal and insurance. These are cash costs not covered by the mortgage, and land transfer tax varies by province.
Does rental income help me qualify? Yes. Lenders count part of the rental income, which increases your borrowing power compared with a single-family home, subject to the stress test.
How do I know if a rental is profitable? Look at cap rate, cashflow, cash-on-cash and gross rent multiplier with all expenses included, plus the tax picture. A calculator does this before you offer.
Related guides
- Free decision card: assessment value and welcome tax by address
- Down payment for a plex: the 2026 rules
- Duplex, triplex or fourplex: which to choose?
- Using your FHSA to buy a plex
- Quebec welcome tax: brackets and calculation
- Capital gains on a rental property
- Quebec rent increase 2026: the TAL method
- Quebec City rental market: average rents
- Gatineau rental market: average rents
For information only, not tax, legal or financial advice. Rules change; confirm with an accountant or mortgage professional. Last verified: June 2026.