Buying a Second Property

What you need to know if you’re looking to finance a vacation home or purchase a residential investment property.

Why get a second property?

You may be looking to finance a vacation home or purchase a residential investment property. Both of these home ownership goals can be achieved through a variety of financing options.

  • You can apply for a new mortgage loan secured by the second property.
  • You could refinance your existing mortgage loan to access the equity that you have built in your primary home.
  • You may want to consider a TD Home Equity FlexLine which offers the flexibility of a line of credit with the stability of a term portion.

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Your second property: what you need to know

  • A high ratio mortgage is available if you or family members plan to live in the home, on a rent-free basis.
  • Investment properties are not eligible for high ratio default insurance-a down payment of at least 20% is required.
  • There may be unit limitations of up to 4 units on a rental property.
  • The Canadian Home Buyers Plan for using RRSP's is not eligible on a second property.
  • Some costs are much the same as your first purchase: valuation fees, legal fees, and a title search.
If a buyer’s deposit is less than 20% of the purchase price (or value of the property, whichever is lower) the mortgage must be insured against payment default by a Mortgage Insurer, such as CMHC.

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