Principal Residence vs Investment Property – How the Mortgage Process Differs

 



Introduction

In Abbotsford’s thriving real estate market, many clients are exploring real estate not just as homeowners but as investors. Whether you’re purchasing your family home or your first rental property, understanding how the mortgage process differs can help you make smarter financial decisions.

At Sandhu & Sran Mortgages, we specialize in both residential and investment property financing across the Fraser Valley.

  1.  Principal Residence – The Basics

A principal residence is the home where you live most of the year. Lenders view it as lower-risk since you’re personally invested in maintaining it.

Key benefits include:

  • Lower down payment (as low as 5%)
  • Better interest rates
  • Easier qualification standards

2. Investment Property – What Changes

Buying a rental or investment property means stricter requirements. Lenders typically ask for:

  • Minimum 20% down payment
  • Proof of rental income and vacancy expectations
  • Higher credit score and debt-service coverage

Tax note: Income from rentals must be declared, and capital gains may apply when you sell.

3. How the Mortgage Process Differs

Criteria

Principal Residence

Investment Property

Down Payment

5–10%

Minimum 20%

Interest Rate

Lower

Slightly higher

Qualification

Easier

Requires rental income proof

Insurance

Eligible for CMHC

Usually not eligible

4. Local Trends in Abbotsford

In recent years, Abbotsford and Mission have seen rising demand for rental housing, making investment properties an attractive opportunity. However, cash flow and long-term market trends should be carefully reviewed.

At Sandhu & Sran Mortgages, we can help you assess rental yield, financing options, and lender requirements — ensuring your investment remains profitable.

5. How a Mortgage Broker Helps

Working with an experienced mortgage broker in Abbotsford gives you access to multiple lenders and investment-specific mortgage products that banks often overlook.

We guide you through everything from rental income analysis to refinancing strategies for portfolio growth.

Conclusion

Whether it’s your dream home or your first income property, understanding how the mortgage process differs ensures smarter financial planning.

Contact Sandhu & Sran Mortgages today for tailored guidance on purchasing or refinancing in Abbotsford, BC.


Location: Abbotsford, BC, Canada

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