How Refinancing Your Home Can Help You Buy an Investment Property

Refinancing lets you tap equity in your home to buy an investment property, often with lower interest rates and better cash flow. Here's how it works.

Using a Refinance to Buy an Investment Property

If you're looking to invest in real estate, refinancing your existing mortgage can be a smart move. It lets you tap into lower interest rates or pull equity out of your home to help finance the purchase. We'll walk through how refinancing works and how you can use it to buy an investment property in Canada.

What Refinancing Actually Means

Refinancing means getting a new mortgage to replace your existing one. The main reason people refinance is to lock in a lower interest rate, which can lower your monthly payment and save you money over the long haul. You can also use refinancing to access the equity you've built up in your home — that cash can then become a down payment for an investment property.

Why Refinancing Works for Investors

Access to Equity: Refinancing your existing mortgage gives you access to the equity in your home. You can use that equity as a down payment on an investment property, so you don't have to come up with a large sum of cash upfront.

Lower Interest Rates: Refinancing can let you take advantage of lower interest rates. That means lower monthly payments, which frees up cash flow for other investments.

Tax Benefits: Investing in real estate comes with tax perks. The interest on your mortgage is tax-deductible, which can reduce your overall tax bill.

Potential for Rental Income: An investment property can give you a steady stream of rental income to help offset your mortgage payments. Over time, the property may also appreciate in value, resulting in significant capital gains when you decide to sell.

How to Refinance for an Investment Property

Determine Your Eligibility: To qualify for refinancing, you'll need a good credit score, stable income, and a healthy debt-to-income ratio. You'll also need a good amount of equity in your home.

Shop Around for the Best Rate: Once you know you're eligible, it's important to compare options. As licensed mortgage brokers in Alberta (with the opportunity to fund deals coast to coast), we can compare rates and terms from multiple lenders — including the big banks. At no cost to you.

Obtain a Home Appraisal: To determine the value of your home, you'll need an appraisal. You can hire a professional appraiser or ask your bank or mortgage broker to arrange one.

Close the Deal: Once you've found the best refinancing option for your needs, it's time to close. That means signing the necessary documents, paying any fees, and receiving your new mortgage.

What This Means for You

Refinancing can be a smart financial move if you're looking to invest in real estate. By accessing equity in your home, taking advantage of lower interest rates, and benefiting from tax perks and rental income, you can make your investment property goals a reality. If you're ready to explore your options, we can walk you through the numbers and help you find the right fit.

Matt Broom-Hall · Founder & Mortgage Broker · Say hello →

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