It’s rare to see 80% rental offset for all rental income from all properties. The majority of lenders allow only a 50-80% add-back on rental income, especially rent from a non-subject property that is not owner occupied. (That’s relevant because an 80% offset allows for more flexibility than an 80% add-back. In other words, it’s harder to qualify with an add-back).
On exceptional files, Merix will even consider non-conforming rental income (from a basement suite for example) in major urban centers like Vancouver and Toronto.
The only thing we’d wish for is that Merix didn’t have a rate premium on rental deals. But, surcharge or not, Merix is competitive.
Sidebar: MCAP, Canadiana and Macquarie have their own versions of Genworth’s non-owner occupied rental program with 80% rental offset. Unlike Merix, however, not all of them allow 80% offset on all rent that the borrower receives.
If you don’t mind paying a rate premium, Equitable Trust will finance rental purchases to 85% LTV with a 100% rental add-back.
Incidentally, CMHC (the nation’s biggest default insurer) does not insure rental financing with an offset calculation. That gives Genworth an edge in this department.
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