Cost- Where more than 50% of a borrower's qualifying income comes from rental income, lenders now treat the loan under different underwriting criteria.
- This specifically targets investors with multiple rental properties or a heavy reliance on rental income, rather than typical owner-occupiers with a single secondary rental unit.
- The change reflects regulators' broader focus on ensuring rental income is assessed conservatively given its relative volatility compared to employment income.
What actually changed
Lenders now apply different underwriting treatment once more than half of a borrower's qualifying income comes from rental properties rather than employment or other traditional income sources. In practice, this generally means more conservative treatment of rental income in the qualifying calculation — lenders are less willing to count 100% of gross rent toward income the way they might for a borrower whose income is mostly employment-based with just one secondary rental property.
Who it actually affects
This change is targeted at investors with multiple properties or those who've structured their finances so rental income is their primary source of qualifying income — not the much larger group of owner-occupiers who rent out a basement suite or one secondary property alongside a primary job. If rental income is a meaningful but minority share of your total qualifying income, this change likely doesn't apply to your situation the same way.
How to plan around it if it does apply to you
If you're building a portfolio of rental properties and rental income is becoming your primary qualifying income source, talk to a mortgage broker early about how a specific lender will treat your next application under these criteria — treatment can vary meaningfully between lenders, and some specialize in portfolio-investor lending with underwriting built around exactly this situation. Run your own numbers on a specific property with the rental cash flow calculator before assuming a given lender's treatment of your income.