Mortgages for investment properties
We help investors finance rental properties and plan the next purchase. Lenders treat rental income in different ways, and that shapes how much you can borrow.
- Down payment on rentals
- How rental income is counted
- Two to four unit homes
- Planning your next purchase
Plan for 20% down on a rental
A property you will not live in usually needs at least 20% down, since mortgage insurance is not available on it. If you live in one unit of a two to four unit home, the minimum down payment can be lower.
Each lender counts rent differently
Some lenders add a portion of the rent to your income. Others subtract it from the property's costs, which is called an offset. The method changes your borrowing room, so we compare lenders on this point before you make an offer.
Answers
All answersHow much down payment do I need for a rental property?
Usually at least 20% for a property you will not live in. If you live in one unit, a two-unit home follows the same 5% and 10% tiers as a single home, and a three or four unit home needs at least 10% down.
Do lenders count rental income when I apply for a mortgage?
Yes, but each lender does it differently. Some add a percentage of the rent to your income, and others subtract it from the property's expenses. The method can change how much you can borrow.
Can I use my home equity to buy an investment property?
Yes. Many investors refinance or use a HELOC on their home to fund the down payment on a rental. You need to qualify for both mortgages, and interest on money borrowed to earn rental income may be tax-deductible, so check with your accountant.
How many mortgages can I have at once?
There is no legal limit, but many lenders cap how many properties or how much total mortgage they will hold for one borrower. As your portfolio grows, you often move to lenders that focus on investors.