Properties are one of the best investment options to include in your portfolio. When it comes to investment property mortgage, the type of mortgage you choose should reflect your short term and long term investment goals. The goals you have for your investment future will help you decide on the property, location, amount of down payment and term of the mortgage to take on.
In Ontario, the minimum down payment required to obtain an investment property mortgage is 20%. This amount can be leveraged against your existing home that you own by doing equity take out, or it can certainly come from any savings you may have. Unless you intend to have an Equity line of credit as well, we don’t typically recommend putting a larger down payment than the minimum required under this program. Putting more funds into the property would prevent ease of access to them in case you wanted to pursue other types of investments. An Equity Line of credit will give you more flexibility because it would allow you to immediately access the additional funds you used to put as a down payment if you ever decided to use them in the future.
Another important thing to consider when looking into an investment property mortgage is the term of the mortgage. Depending on your goals, you may not want to lock into a 5 year term because the penalties to breach the mortgage contract may outweigh the investment gains you would have made in the previous years on that property. Conversely, you may want to commit to a longer term if you are looking to hold onto the investment property for years to come and take advantage of the low rates that are currently being offered.
An investment property mortgage isn’t necessarily a product in itself, but rather a mortgage taken with the mindfulness to advance your personal investment goals in the real estate world. In other words, the mortgage is like any other mortgage, but your perspective on Interest rates, terms and conditions can be different than if the mortgage were to be taken for your own home.
For more information on Investment property mortgage, please feel free to reach out to us by telephone-905.455.5005 or Email- broker(at)cmsmortgages(dot)ca