Buying another home
At Capital Mortgages, we acknowledge that today’s hectic lifestyle demands alternative home ownership options – whether acquiring a second home in the city to reduce the weekly commute or securing a lakeside cottage for weekend getaways.
Our access to Vacation/Secondary Home Programs empowers Canadians to purchase a second home with an affordable monthly payment and a 5% down payment. Consumers exploring a second property for recreational use, a vacation home, or a second residence have various options to consider.
Clear definitions distinguish a second residence as any property where the client or their family intends to occupy the premises on a rent-free basis. Additionally, a second home is precisely that – a second home. It’s crucial to note that a rental property falls under different qualification criteria.
Financing a second home or recreational property follows a straightforward process. If you aim to maximize financing for your second home, be prepared for the possibility of a higher ratio mortgage. At Capital Mortgages, we are committed to assisting you in navigating the nuances of second home financing with ease.
Basic Requirements for Secondary Homes / Vacation Homes
Acceptable loan purpose
- Homes available for purchase and refinance
- Program does not provide for the purchase of investment, rental pool or timeshare properties; therefore, incidental rental income will not be used for qualification purposes.
Loan-to-value ratio limits
- Properties: 95% LTV (Purchase) and 95% LTV (Refinance)
Max Loan Amounts
- No Maximum
Eligible properties
Type A Properties (Secondary Homes):
- Property characteristics must comply with the Insurer First Mortgage Owner Occupancy Program
- Up to two units Maximum
- Available for purchase and refinance
Type B Properties (Vacation Homes):
- Property characteristics same as Type A properties except for the following;
- Property need not be winterized
- May have seasonal access (road not plowed during winter)
- One unit maximum
- Available for purchase only
Terms/qualifying interest rates
- 6 months up to 25 years – Fixed, standard variable, capped variable and adjustable rate mortgages are permitted
- For terms less than three years, the qualifying interest rate is the greater of three-year posted rate or contract rate
- For terms of three years or more, we use the contract rate
Amortization Options
- Up to 30 Years (Type A properties)
- Up to 25 Years (Type B properties)
Premium Rates
LTV Ratio / Type A properties* / Type B properties
Up to 65% 0.50% 1.25%
65.01% – 75% 0.65% 1.40%
75.01% – 80% 1.00% 1.75%
80.01% – 85% 1.75% 2.50%
85.01% – 90% 2.00% 2.75%
90.01% – 95% 2.75% N/A
Premium is non-refundable
- a .20% premium surcharge will be applied to the above premium rates for every 5 years of amortization beyond the traditional 25-year mortgage amortization period
Portability top-up rates:
LTV Ratio / Type A properties* / Type B properties
Up to 65% 0.50% 1.25%
65.01% – 75% 2.25% 3.00%
75.01% – 80% 2.75% 3.50%
80.01% – 85% 3.50% 4.25%
85.01% – 90% 4.25% 5.00%
90.01% – 95% 4.25% N/A
Premium is non-refundable
- a .20% premium surcharge will be applied to the above premium rates for every 5 years of amortization beyond the traditional 25-year mortgage amortization period.