Case Study · Residential / Prime

Permanent Residents Since August and a First Home Still Closing: A Major Bank Financed a Rental Condo at 80% in Coquitlam

Q: Can new permanent residents buy a rental property?

This couple did, with a major Canadian bank. In this 2023 file a married couple of scientists, in Canada since 2017 and permanent residents since August 2023, bought a new one-bedroom Coquitlam condo to rent out with about $420,000, 80% of a value of about $530,000.

Q: Can you buy a rental before your first home closes?

This couple did. In this 2023 file their first home was due to close in October, and its mortgage of about $700,000 counted against the rental too.

Q: How did the bank count the condo's tax, strata fees and heat?

At $1 each. In this 2023 file the bank's rental policy counted the condo's property tax, strata fees and heat at $1 each.

Q: What debt-service ratio did the bank accept?

A total debt-service ratio just over 45%, in this 2023 file, on salaries of about $100,000 and about $99,000, with scores of 783 and 794.

Q: What were the terms?

About $420,000 on a three-year fixed term at about 6.9% in 2023, with a 30-year amortization. The 20% down came from about $230,000 in savings and investments, and the condo was let for about $2,400 a month on a one-year lease from December 2023.

A married couple of scientists, in Canada since 2017 and permanent residents since August 2023, set out that fall to buy a new one-bedroom Coquitlam condo to rent out, with their first home due to close in October.

Closed in 2023 · Published October 18, 2026

Residential
Prime lender
Purchase
Investment property
Rental
New to Canada

Value: about $530,000
Mortgage: about $420,000
Loan-to-value: 80%
Credit scores: 783 and 794
Rate in 2023: about 6.9%, three-year fixed

The Situation

The Challenge

That home's mortgage of about $700,000 counted against the rental too, and on salaries of about $100,000 and about $99,000 the total debt-service ratio came to just over 45%.

The Solution

In 2023 we placed about $420,000 with a major Canadian bank, 80% of a value of about $530,000, on a three-year fixed term at about 6.9% with a 30-year amortization. Under the bank's rental policy the condo's property tax, strata fees and heat counted at $1 each, scores of 783 and 794 carried the file, and the 20% down payment came from about $230,000 in savings and investments.

The Outcome

The condo, the couple's first rental, was let for about $2,400 a month on a one-year lease from December 2023.

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A rental condo bought with a first home still closing. See what your own income and debts support.

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Income & debts

Household gross income (annual)

Monthly liabilities

How lenders count these: car loan = actual payment; credit cards + unsecured personal LOC = 3% of balance each; student loan = 1–1.5% of balance even on a $0 plan.

Car loan payment (monthly)

Credit card + unsecured personal LOC balance

Student loan balance

Down payment

Mortgage terms

Mortgage rate (%)

Amortization

Term

Rate type

Housing carrying costs (monthly)

Property tax

Heat

Condo / strata

Suite rent

Heat: CMHC standard $100/mo. Condo: only 50% counts toward your housing ratio.

I own other propertiesCheck this if you own any other real estate (owner-occupied, vacation, or rental). Leave unchecked if none.

Max purchase price

$738,567

$638,567 mortgage + $100,000 down · limited by down payment

Total monthly debt (stress-tested)$4,550

Qualified at 6.50% (OSFI B-20 stress test).

Two ways to buy

Same income, same down payment — two strategies. Insured pricing assumed ~0.25% below conventional.

Conventional

20% down (uninsured)

$500,000

Down: $100,000 (20.0%)

Mortgage: $400,000

Rate assumed: 4.75%

Monthly payment

$2,075/mo

Principal & interest at 4.75% over 30-yr amort

Saves $19,796 in CMHC premium

− Extra interest @ +0.25% over 5-yr term: $4,750

Est. net savings: $15,046

Limited by 20% down rule — extra income capacity is unused.

Insured

Less than 20% down (CMHC-insured)

$738,567

Down: $100,000 (13.5%)

Mortgage: $638,567

Rate assumed: 4.50%

Monthly payment

$3,320/mo

Principal & interest at 4.50% over 30-yr amort

+ CMHC premium: $19,796 (financed)

Total loan w/ premium: $658,363

30-yr insured amort (first-time buyers / new builds only) adds a 0.20% premium surcharge — not included above.

Limited by income — your cash covers more than the minimum down at this price.

What this calculator does that most don't

Models liabilities the way lenders actually do: credit cards at 3% of balance, student loans at 1–1.5% of balance even on $0 payment plans
A multi-property builder that applies 100% rental add-back to income and full carrying costs to TDS — portfolio buyers get real numbers
Compares insured vs conventional side by side, netting the CMHC premium saved against the extra interest of the higher conventional rate
Discloses the exception ratios brokers actually place files at: A-lenders to 50/50, alternative lenders to 60/60 — numbers no bank calculator will print

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Contract vs stress-test payment

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Exceptions — you may qualify for more▾

• Conventional (A-lender) — strong files: as an exception, may be considered up to 50% / 50% GDS / TDS.
• Alt-lender (minimum 20% down): up to 60% / 60%, and even higher at ≤65% LTV.
• Insured deals (< 20% down): hard capped at 39% / 44% — no exceptions.

This calculator shows the standard 39/44 case. Exceptions depend on file strength and lender — get in touch to find out your true qualification.

Questions and answers

Questions about this file

Can new permanent residents buy a rental property?+