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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What You Need to Know About Mortgages and Parental Leave

By Josh Perez • July 8, 2026
If the title of this article caught your attention, chances are your family is growing. Congratulations. If you’re thinking now is the right time to move into a home that better fits your growing family—but you’re unsure how parental leave affects your ability to qualify for a mortgage—you’re in the right place. Here’s the good news. Qualifying for a mortgage while on parental leave is possible when it’s done correctly. When you work with an independent mortgage professional, lenders can often qualify you based on your return-to-work income , as long as you can provide documentation confirming you have guaranteed employment waiting for you. A word of caution If you walk into a bank branch and disclose that you’re currently on parental leave, there’s a chance the bank will only allow you to qualify using your parental leave income. That can significantly reduce your borrowing power. Parental leave income is typically limited to 55% of your previous earnings, up to a weekly maximum. Qualifying on that amount alone can restrict your options and impact the type of home you can purchase. Why lender choice matters One of the biggest advantages of working with an independent mortgage professional is choice . You’re not limited to one lender’s rules or products. Some lenders will allow you to qualify using 100% of your confirmed return-to-work income , which can make a meaningful difference in your approval amount and overall options. What you’ll need to qualify Most lenders will require an employment letter that includes: Employer name (preferably on company letterhead) Your job title Original start date (to confirm probation has been completed) Confirmed return-to-work date Guaranteed salary upon return Lenders want reassurance that your income will resume once parental leave ends. You may also be asked to provide income history from the past couple of years, which is standard for most mortgage applications. One important note Whether or not you actually return to work after parental leave is entirely your decision. From a mortgage perspective, qualification is based on having a confirmed position available to you at the time of approval. If you have questions about qualifying for a mortgage while on parental leave—or anything mortgage-related—please connect anytime. I’d be happy to walk you through your options and help you plan with confidence.
Suburban two-story house with a front porch, two-car garage, and a large tree-lined lawn.

Gifted Down Payment in Ontario? Don't Skip This Step

By Josh Perz • July 7, 2026
Using a gifted down payment to buy a home in Ontario? Learn exactly what lenders require — and the common mistakes that can delay or derail your approval.