Understanding Rental Offset and Choosing the Right Lender for Your Investment Needs

Josh Perez • December 15, 2024

As a mortgage broker, I often hear this question: “Which lender has the best rental offset?” It’s a valid concern for investors, but here’s the truth—it doesn’t really matter.

Let me explain why.

"The best rental offset isn’t necessarily the best lender for your investment needs. It only matters after reviewing your application, documents, property specifics, and what you're hoping to accomplish."

The Best Rental Offset Isn’t Always the Best Option

Imagine this scenario:

  • Lender A uses 100% of rental income for calculations.
  • Lender B uses 50% of rental income.


On the surface, Lender A seems better, right? But here’s the catch:

  • Lender A deducts only the mortgage payment.
  • Lender B, meanwhile, deducts the mortgage payment, property taxes, property management fees, utilities, and insurance.


Now which one works better for you? It depends entirely on the specifics of your situation.


Interest Rates Don’t Tell the Whole Story

Here’s another example:

  • Lender A offers a 5.75% interest rate and verifies rental income based on what you reported on your tax return. They qualify you for a $700,000 mortgage.
  • Lender B offers a 6.5% interest rate but verifies rental income using current leases or market rents from an appraiser. They qualify you for an $850,000 mortgage.


Which lender is better? Again, it depends on your goals, financial profile, and the property specifics.


Tailoring the Strategy to Your Goals

Your investment needs are unique, and the “best” lender depends on what you’re trying to accomplish. Whether it’s:

  • Purchasing your first rental property or your tenth,
  • Refinancing to pull the maximum equity,
  • Setting up a home equity line of credit (HELOC),
  • Minimizing your down payment for the next property,


The right strategy involves a lot more than comparing rental offsets or interest rates. It requires a comprehensive review of your application, documents, and long-term goals.


A Call to My Fellow Mortgage Brokers

Let’s be real: reciting rates and offsets without understanding an investor’s full picture is lazy. It’s not just a disservice to investors—it’s a disservice to the value we, as brokers, are supposed to provide. Every situation is unique, and our role is to guide investors toward the solutions that truly fit their goals and strategies.


Final Thoughts

The “best” rental offset isn’t necessarily the best choice for your investment journey. It’s about aligning your financing with your broader investment goals and ensuring that the lender you choose can support your strategy, whether it’s growing your portfolio or maximizing your returns.


If you’re ready to take your investment plans to the next level, let’s connect. Together, we’ll create a tailored strategy to help you achieve your goals.

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Josh Perez
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Deposit vs. Down Payment: Key Differences for Homebuyers

By Josh Perez • February 18, 2026
When you’re buying a home, two terms often cause confusion: deposit and down payment . While they’re related, they serve very different purposes in the homebuying process. Here’s what you need to know. What Is a Deposit? A deposit is the money you provide when you make an offer on a property. Think of it as a show of good faith that proves you’re serious about purchasing. How it works : Typically, you provide a certified cheque or bank draft that your real estate brokerage holds in trust. If your offer is accepted, the deposit remains in trust until the deal moves forward. If negotiations fall through, the deposit is refunded. Connection to your down payment : Once the sale is finalized, your deposit becomes part of your total down payment. Why it matters : The amount is negotiable, but a larger deposit can make your offer more attractive in a competitive market. Keep in mind, however, that if you back out after conditions are removed, you risk losing your deposit. What Is a Down Payment? Your down payment is the amount you contribute toward the purchase price of your home when securing a mortgage. Minimum requirement : In Canada, the minimum down payment is 5% of the home’s purchase price. Anything less than 20% requires mortgage default insurance. Sources : Down payments can come from your savings, the sale of another property, RRSP withdrawals (through the Home Buyers’ Plan), a gift from family, or even borrowed funds. Example: How They Work Together Imagine you’re buying a $400,000 home with a 10% down payment ($40,000). When you make your offer, you provide a $10,000 deposit . Once conditions are met, that deposit is transferred to your lawyer’s trust account. At closing, you add the remaining $30,000 to complete your full down payment. The lender provides the rest—$360,000—through your mortgage. The Bottom Line Your deposit shows commitment and secures your offer, while your down payment is what makes the mortgage possible. Together, they work hand in hand to get you into your new home. 📞 If you’d like clarity on deposits, down payments, or any other part of the mortgage process, let’s connect. I’d be happy to walk you through it step by step.
Cozy armchair next to a small wooden table with a mug and an open book. Sunlight streams through a window.

Is a 5% Down Payment a Mistake? Here’s the Unpopular Truth.

By Josh Perez • February 15, 2026
Discover why a 5% down payment isn’t always irresponsible. Learn when a low down payment is a smart financial move for Ontario homebuyers and when it’s a risk.