Canada question: bank doesn’t like rent bsmt of my prim residence

[Joanne Boudreault]

Hello

Question for Canada REI experts.

I own a primary residence in Ontario

I am renting half of it and live in the other half

When I bought the house last year my bank didn’t know I would rent half (I didn’t either)

Now I am looking to buy another SFH as a way to dip my toes in the REI market.

I approached my bank (TD) and they seemed upset I rented half my current house. As a result, for the new house I would buy, they want to charge an extra 25% of my current mortgage as a down payment on the new house, in addition to the 20% down....

Do you know anything about this?

Seems odd to me.

Are there strategies to bypass this including changing banks? Or maybe forming a company?

Any hint is welcomed

[Zorya Belanger]

Hi @Joanne Boudreault!

That doesn't seem right. It should be based on your intention at the time that you bought your house, and your intention was not to rent it. I would go to a different bank (like Scotiabank), or better yet, use a mortgage broker to shop around for you. A Canadian investor-focused broker knows all the rules for all the banks, and will know which order of lenders to use based on your goals. Let me know if you need a recommendation, as I have a great broker based in Ontario.