Priced out of the market? How buying a home with a rental suite can help.

If you’ve been scrolling listings thinking, “There’s no way my income gets me into that neighbourhood,” you’re not alone. Here’s the part most buyers don’t realize: sometimes the property itself can change the outcome, even when your job and income stay exactly the same.

An owner occupied home with a proper rental suite can add qualifying income to the file and stretch what you’re approved for.

Same job. Same income. Same you.
But if the home has a legal-ish, self-contained rental suite, the math can change fast.

This strategy is especially helpful if:

• you’re priced out of the neighbourhood you actually want

• only one income can go on the application (new credit, new-to-Canada, maternity leave, etc.)

• you’re self-employed and your net income looks smaller on paper than real life

A suite can add a second income stream to the file—without you needing a higher salary.

What lenders usually consider a “real” suite

For rental income to count, lenders generally want a unit that functions like a separate apartment:

• Full bathroom (toilet + sink + tub/shower)

• Full kitchen (stove + fridge + sink)

• Separate entrance

• Rented as one unit (not room-by-room, not short-term/Airbnb)

Different lenders have slightly different rules, but if it walks and talks like a small standalone apartment, you’re in the right lane.

How the rental income gets used

For an owner-occupied purchase (you live in the home), rental income can usually be included in the qualification.

Two common ways lenders confirm rent:

1) There’s a tenant already (and the documents are available from seller)

• Use the existing lease (plus supporting docs, depending on the lender).

2) No tenant / tenant leaving / no financials to show

• Order a market rent appraisal and use the projected rent.

Here’s the part that can really move the needle:
Some lenders treat rental income more generously than others. Certain programs can use up to 100% of the rental income in the calculation, and sometimes even remove or offset other home related costs we typically have to leave in the debt ratios (property taxes, heat)

Example: if market rent supports $1,000/month, that’s $12,000/year of income (on paper) that may help you qualify.

Reality check: not every lender does this the same way—some Banks will only allow a smaller portion of rent (such as 50%). The lender options matter.

Down payment basics (owner-occupied 2–4 units)

Buying a home you’ll live in that also has a suite doesn’t automatically mean a massive down payment.

Typical minimums (subject to insurer + lender rules):

• 1–2 units: as low as 5% down on the first portion of the price (and higher percentages on the portion above certain thresholds)

• 3–4 units: 10% minimum down

• pure rental / investment: 20% minimum down

Rules can change, and the exact numbers depend on a ton of factors, so treat this as a starting point, not gospel.

What if it’s “Almost a suite”?

Purchase Plus Improvements can help. Sometimes the house is this close..

Common examples:

• kitchen + bath but no separate entrance

• entrance + bath but no kitchen

• bath missing the tub/shower

With Purchase Plus Improvements, you can roll eligible work into the mortgage to finish the suite. In this case, the lender options are very limited and only a portion of projected rent can be used in this setup, but even that can help versus using no rent at all.

Practical note: renovation funds are typically held back and released in draws as work is completed/inspected, so you do need some cash upfront to get things started.

The takeaway

If you’re priced out, don’t assume the only solution is “earn more” or “buy less house.”
Sometimes the smarter move is buying a home that helps pay for itself, and choosing a lender that rewards that structure.

This is another example of why options matter. If you’re curious on how this applies in your case, let’s chat about it.

Send me an email at mortgages@essydupuis.ca or book a call to start the conversation