Does rental income count when I qualify for a mortgage? (Ontario)

Yes, in Ontario rental income can count when you qualify, but how much depends on who sets the rule. Under CMHC's rules for an insured home you live in, up to 100% of a 2-unit property's gross rent may count as income, or up to 50% for 3 or 4 units. On an uninsured mortgage, each lender sets its own method, and the methods can differ a great deal.

Why the rent is often discounted

Rent is real income, but rent comes with vacancies, repairs, insurance and other costs. Many lenders discount rent to allow for those costs, so the amount you qualify on can be less than the rent you collect.

Insured mortgages: the CMHC rule

An insured mortgage is one with less than 20% down. On a property you will live in, CMHC's rules let lenders add up to 100% of the gross rent from a 2-unit property, the home you are buying, to your income for your debt ratios, and up to 50% from a 3- or 4-unit property, or a net approach that subtracts costs first (source: CMHC, Rental Income, published May 22, 2024, checked October 2026).

Insured mortgages are generally for homes you or a close relative will live in. So the CMHC rule usually applies to a house with a rental unit, where you live in the other unit.

Two ratios matter. GDS is your housing costs as a share of gross income, capped at 39%. TDS is housing costs plus other debts, capped at 44%. Both are calculated at the qualifying rate: the greater of the contract rate plus 2 percentage points, or 5.25%.

A worked example with a basement apartment

These are illustrative figures. You earn $90,000 a year and are buying a house with a basement apartment that rents for $2,000 a month.

1. A house with one rental unit is a 2-unit property, so up to 100% of the gross rent may count: $2,000 × 12 = $24,000 a year.
2. Your qualifying income becomes $90,000 plus $24,000, which is $114,000.
3. At 39%, your maximum monthly housing cost rises from about $2,925 to about $3,705.

The extra room from the rent can make the difference between qualifying and not. The lender may ask for a signed lease or an appraiser's estimate of market rent.

Uninsured mortgages: lenders vary

With 20% or more down, or on a property you will not live in, the mortgage is generally not insured. Banks, credit unions and monoline lenders then each use their own method. Two common approaches are:

• Add-back: a share of the rent is added to your income, similar to the insured rule.
• Offset: a share of the rent is subtracted from the property's costs, which can work out differently depending on your other income and debts.

The share counted and the method vary by lender and property type. The same rental can qualify you for different amounts with different lenders. Rental income is one of the places where comparing lenders matters most.

If your rental portfolio is large or your income is complex, some alternative lenders take a broader view of rental cash flow, usually at a higher cost. We start with institutional lenders.

What to do next

If you are buying a home with a rental unit or an investment property, use our call-me-back form and we will compare how lenders would treat the rent. You can also read about rental and investment mortgages.