London & Southwestern Ontario
Investment Property Mortgage in London, Ontario
London's rental demand is driven by Western University, Fanshawe College, the hospital network and steady in-migration from more expensive Ontario markets. That makes the math work more often here than in the GTA — but lender rules for rentals are stricter than for owner-occupied homes.
Nandan Bajani · Licensed Mortgage Agent | Ontario · The Mortgage Firm Inc.
Down payment and qualification basics
A non-owner-occupied rental generally requires at least 20% down, and mortgage default insurance is not available for pure rental purchases. Two- to four-unit properties where you occupy one unit can qualify with less down under insured programs, which is why owner-occupied duplexes are a common first step for London investors.
How lenders treat rental income
There is no single rule. Some lenders add a percentage of gross rent to your income; others use a rental offset that subtracts a portion of rent from the property's expenses; others apply a debt coverage ratio test on the property itself. The same file can qualify at one lender and fail at another purely because of which method is used — this is the main reason to compare lenders on rentals rather than default to your own bank.
Cash flow inputs to model honestly
- Mortgage payment at the stress-test rate, not just today's rate
- Property taxes, insurance (higher for rentals) and utilities you cover
- Vacancy allowance and turnover costs
- Repairs, maintenance and capital reserve
- Property management if you're not self-managing
Student rentals near Western and Fanshawe
Per-room student rentals can produce strong gross rent, but lenders scrutinize them: some will not lend on rooming-house configurations, and the City of London licenses residential rental units in certain categories. Confirm zoning, licensing and lender appetite before you firm up an offer.
Building a portfolio
Most prime lenders limit the number of financed properties per borrower. Past that point, alternative lenders and commercial-style underwriting take over. Structuring the first two or three purchases with the fourth in mind avoids a stall later.
Related reading
Questions people ask
How much down payment for a rental property in London?+
Generally 20% minimum for a non-owner-occupied rental. Owner-occupied two- to four-unit properties may qualify with less under insured programs.
Will the rent help me qualify?+
Usually some of it will, but how much depends entirely on the lender's rental income method.
Can I refinance my home to buy a rental?+
Often yes, up to 80% of your home's appraised value, subject to qualifying on the combined obligations.
Are rates higher on rental mortgages?+
Typically there is a rate premium compared to owner-occupied mortgages, and it varies by lender.
Run the numbers on your next London rental
A short conversation is usually enough to know what's realistic. No obligation, no pressure.