Buying another home

At Capital Mortgages, we know that today’s busy lifestyle requires more home ownership options – whether it’s a second home in the city to reduce that weekly commute, or a cottage at the lake for weekend getaways. With our access to Vacation/Secondary
Home Programs, Canadians can now purchase a second home with an affordable monthly payment with 5% down payment.

There are many options for consumers wishing to buy a second property for use as a recreational property, vacation home or as a second residence. A second residence is classified as any property where the client or his/her family intends to occupy the premises on a rent free basis. A second home is exactly that, a second home. A rental property is not considered to be a second home and would be subject to different qualification criteria.

Financing a second home or recreational property is farely straightforward. Assuming that you will likely want to maximize the amount of financing you can get on your second home or recreational property, this may require a higher ratio mortgage.

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.