Besides 20% down, what do lenders ask for on a rental property? (Ontario)

In Ontario, a rental property you won't live in generally needs at least 20% down, and lenders generally ask for more than the down payment. Depending on the lender and the property, lenders ask for proof of the rent, the property's own costs, details of every other property you own and, often, savings left over after closing, called reserves. Proof of the rent means leases, or a rent roll for a property with several units. The decision is subject to lender approval, and how rental income is reported on your tax return is a question for your accountant.

Proof of the rent

Rent is income the lender can't see on a pay stub, so it asks for evidence. Commonly:

• Signed leases for each unit, showing the rent and the lease dates.
• A rent roll for a property with several units: one page listing each unit, its rent and its lease dates.
• For a unit that isn't rented yet, often an appraiser's estimate of market rent; some lenders count less without a signed lease.
• If you already own rentals, the tax returns that report that rental income.

How much of the rent then counts depends on the lender's method (how much you can borrow against rental income).

The property's own costs

Lenders generally want the costs that come with the property. Those costs are the property tax bill, the insurance, condo fees if any, heating, and any utilities you pay as the owner. Many lenders use those costs in a coverage check on rentals, to see whether the rent covers the property's costs. A property that doesn't carry itself generally reduces what you can borrow elsewhere (when a rental doesn't cover its costs).

Every other property you own

Each property you own, your home included, is part of the picture. For each one, lenders commonly ask for the current mortgage statement, the property tax bill, the insurance and, for rentals, the leases. Lenders work out what each property costs and what it brings in, and the total feeds into your debt ratios.

The number of properties can matter too. Some banks limit how many financed properties they will lend on (how many rentals a bank will finance).

Reserves

Some lenders ask to see savings left over after the down payment and closing costs. These savings, sometimes called reserves, are a cushion for a vacant unit or a repair. Whether lenders ask, and how much, varies by lender and by how many properties you hold. A reserve requirement is lending policy, not a public rule. Ask the lender early, because the reserve requirement changes how much cash you need on closing day.

Where the down payment comes from

Lenders want to see the source of the down payment: savings, the sale of another property, or equity from a property you already own. Many lenders accept borrowed money, such as a HELOC on your home, but they count its payment as a debt (using a HELOC for a rental down payment). Closing costs, including Ontario land transfer tax, are paid in addition to the down payment (closing costs in Ontario).

A worked example of the cash for a rental condo

Illustrative, not a quote. You are buying a $600,000 rental condo and plan to keep $10,000 in savings after closing.

1. Down payment at 20%: $600,000 × 20% = $120,000.
2. Ontario land transfer tax on $600,000, using the provincial brackets (0.5% to $55,000, 1.0% to $250,000, 1.5% to $400,000, 2.0% above): $275 + $1,950 + $2,250 + $4,000 = $8,475 (source: Government of Ontario, checked October 2026). A Toronto property also pays the municipal tax.
3. Cash needed before legal fees and other closing costs: $120,000 + $8,475 + $10,000 in reserves = about $138,500.

What lenders ask about you, as well as the property

You also need everything any mortgage needs: proof of income, identification and a credit check (documents needed for a mortgage). If you are self-employed, lenders generally look at two years of tax returns (how lenders count self-employed income).

What to do next

Run the property through the rental cash-flow tool to see how its rent compares with its costs. Then use our call-back form and we will tell you what the lenders we work with would ask for on that property.