Edmonton’s mature neighbourhoods like Glenora, Ritchie, Bonnie Doon, and Highlands are seeing a lot of infill development right now: duplexes, skinny houses, multi-family properties, and homes with basement suites. For first-time buyers, a property with a suite can be an attractive option. The rental income helps offset carrying costs, and in some cases it can make a meaningful difference in the mortgage you qualify for.
Watch my video or read on for more details:
How Basement Suite Income Affects Mortgage Qualification
When you’re applying for a mortgage on a property with a basement suite, lenders can factor in a portion of the expected rental income to help you qualify. That rental income effectively boosts your borrowing power by offsetting some of the housing costs in their calculation.
The catch is that not all lenders treat suite income the same way.
Why Lender Choice Matters When Purchasing a Home With a Basement Suite
Some lenders are quite generous with how much rental income they’ll count. Others apply a much more conservative approach, crediting only a small fraction of what the suite actually generates. The difference can have a real impact on whether you get approved and how much you can borrow.
This is where working with a mortgage broker makes a practical difference. Rather than applying to one lender and hoping their policy works in your favour, a broker can match you to the lender whose treatment of suite income gives you the best chance of approval.
What to Think About Before You Buy a Home With a Basement Suite
- Confirm the suite is legal and properly permitted- lenders will ask.
- Have a realistic sense of what the suite can rent for in the current Edmonton market.
- Understand that different lenders will credit different percentages of the income you make.
About Jason Scott, Edmonton Mortgage Broker
Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’m trusted partner who will help you get the right mortgage for your home or investment property. I’m Jason Scott, and I’ll be your Mortgage Broker in Edmonton.
