Looking for an Investment/Rental Property? If so, some lenders have just started offering "Rental Offset" again for calculating the clients' debt ratio. The Rental Offset calculation dramatically improves your ability to qualify.
Rental Offset went away for about 6 months due to changes in the CMHC Rental Property guideline. When these rules changed, most lenders started adding only 50% of the rental income to the clients employment income.
Rental Offset takes 80% of the rental income and deducts that figure from the mortgage payment. For example, say the rental income is $900 per month and the mortgage payment is $750 per month. 80% of the $900 rent is $720. If the mortgage payment is $750, you deduct the $720 rental offset and the net mortgage payment used in the debt ratio calculation os only $30.
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