Comparison of mortgage rates from multiple lenders.
16 April 2023
Category Blog
16 April 2023,
Comparison of mortgage rates from multiple lenders.

Are you planning to invest in an income property in Quebec but don’t know the financing options for this type of property?

Here is a brief overview of mortgage financing for multi-unit buildings for your reference.

What is a multi-unit rental building?

Invest in a duplex for building wealth.

A “multiplex” or “multi-unit” is a property with at least 1 residential unit. In the mortgage financing rules, we distinguish, on the one hand:

Income properties for residential use

Commercial income properties

Properties with 1 to 4 rental units

Properties with 5 or more rental units

These distinctions are made when applying for mortgage financing because the rules surrounding the purchase of a multi-family dwelling with five or more units differ from those surrounding the purchase of a building with four or fewer units.

It should also be noted that if the owner is using the property as his own residence, the maximum loan-to-value ratio changes.

The loan-to-value ratio

The loan-to-value ratio determines the maximum amount of a secured loan based on the market value of the asset pledged as security.


Did you know that you can compare mortgage rates online from more than 20 banks in Quebec, free of charge? In fact, mortgage brokers have access to exclusive comparison software. Use them to find the best rate and save money.

Apply for multi-unit mortgage financing with a mortgage broker.

What are the advantages of investing in a multi-unit income property?

Despite the risks associated with this type of investment, the sales of multi-unit properties have increased by 19% in 2021. This is no accident. Indeed, real estate – especially rentals – can be an excellent investment!

Here are just some of the key benefits of this type of investment:

Evolution of the PLEX market (2-5 units) between 2000 and 2022 in Quebec

Income properties with 1 to 4 residential units


For a duplex, the minimum down payment is 5% (plus 10% for the portion exceeding $500,000). This rate is only available if the buyer has loan insurance.

If the owner does not live in the house, the required down payment is 20%.

If the borrower has a down payment of 20%,  CHMC mortgage insurance is not required.

A duplex as a home and rental property.

Triplex or Quadruplex

Triplex or quadruplex as a real estate investment.

For a triplex or a quadruplex, the minimum down payment is 10%. This rate is only granted if the buyer has loan insurance.

If the owner does not intend to use one of the units for his residence, the required down payment is 20%. 

Below is a summary to guide you in planning your purchase:

Income properties with 1 to 4 residential units





Minimum down payment with owner occupancy, with loan insurance




Minimum down payment with owner occupant, no loan insurance




Minimum down payment with non-resident owner




* 5% if your mortgage is under $500,000. You will have to pay 10% of the amount exceeding $500,000.

Income properties with more than 5 residential units

Commercial or residential mortgage financing.

When you wish to acquire an income property with 5 units or more, the rules regarding the down payment are somewhat different from those in effect for multi-unit buildings with 4 units or less.

Whether you are an owner-occupant or not, the minimum down payment will be 15% of the total market value of the building and not the selling price.

Another difference is that a building with more than 5 units will be considered a commercial asset and not a residential one.  In this case, you will need to obtain a commercial mortgage.

Conversely, a building with 4 units or less will be considered a residential asset. The buyer will then be eligible for a residential mortgage – with significantly lower rates.


If the housing stock does not exceed a certain number of units or a certain mortgage amount, some banks may grant you residential financing (more advantageous than commercial).

Examples of banks that would be able to grant you a home loan:

Desjardins Bank

Residential financing is possible for a 5 to 8-unit property

RBC Royal Bank

Residential financing is possible for 5 to 6-unit property

Apart from the difference in mortgage rates between commercial and residential financing, there is another distinction between the two types of loans. This is in the qualification criteria.

The qualification for this type of loan depends essentially on:

What is mortgage default insurance?

Mortgage default insurance for loans with less than 20% down payment.

Only three companies are qualified to provide mortgage default insurance in Canada.

How much does it cost?

The premiums for mortgage default insurance is based on a percentage of the loan amount and your down payment. 

The greater the ratio of the total price of the property to the amount of the loan, the higher your insurance premium will be (between 2.8% and 4% of the total mortgage amount).

Do I have to buy mortgage default insurance?

If you make a down payment of at least 20% of the value of the property, you are not required to pay mortgage default insurance.

What is the price of a PLEX in Quebec?

In January 2023, the median price for plexes in Quebec CMA was $330,000, a slight decline of about 5% compared to January 2022.

Over in Metro Montreal, the median price for a plex-townhouse as of February 2023 was $545,300.  While the real estate market experienced a cooling off during the pandemic, Canada’s housing market seems to be recovering, according to the Canadian Real Estate Association (CREA).

Are you ready to invest in an income property?

Invest in real estate for passive income.

If you are looking to build wealth or secure your future with passive income, consider investing in an income property such as a townhouse, condo, or commercial building.

Our partner brokers can help you secure the financing you need to launch your project!

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