The client
An investor in the Lethbridge market who built a six-property rental portfolio one deal at a time — every mortgage current, every unit leased — found a seventh: a $410,000 property with a signed lease already in hand. Against tight Canadian rental vacancy, a seventh door looked like the easiest file of the year.
Existing portfolio
6 rental properties, all financed and performing
Separate from her own principal residence
Seventh purchase
$410,000, signed lease $2,250/mo
25% down; conventional, uninsured rental financing
Personal income
$142,000/year
$11,833/month for the ratio math
Own housing
$2,450/month P&I + tax
Her own home, separate from the rental portfolio
Down payment
$102,500 — 25%
Standard for rental financing at most lenders
Regulator
Mortgage associate
Alberta's Real Estate Council of Alberta (RECA)
The problem
The decline had nothing to do with the seventh property's numbers, the tenant, or her income. Her bank's internal rental policy simply stops financing doors at six per borrower — a portfolio ceiling, illustrative of a policy that varies lender to lender and rarely appears on any published rate sheet until an application actually hits it.
Why the ratios never got run
- ▸Six rentals financed, all performing — the bank’s own history with this borrower is clean
- ▸This bank's internal appetite caps rental financing at six doors per borrower, illustrative of a policy that varies lender to lender
- ▸A seventh application at this bank is declined on the door count alone, before GDS or TDS is calculated
For a portfolio this size, a cap like this is invisible until the exact moment it binds — and once it does, the existing relationship offers no path to a seventh door, however clean the history.
The numbers
The seventh property qualifies on its own terms at a lender whose rental appetite runs past six doors, using a 75% rental offset against the property's own carrying costs — a treatment mapped more broadly in our comparison of rental income offset methods.
| Structuring the seventh purchase | Amount |
|---|---|
| Purchase price | $410,000 |
| Down payment (25%) | −$102,500 |
| Mortgage (75% LTV) | $307,500 |
At a 5.65% contract rate (illustrative), the minimum qualifying rate is 7.65%. Unlike an insured purchase bound by CMHC's own GDS/TDS maximums, this uninsured rental file is tested only against the new lender's own ratio ceiling — illustrative of how conventional rental financing is priced, not a regulatory limit.
Offsetting the seventh property's own costs
| Subject property, offset method | Monthly |
|---|---|
| P&I at the qualifying rate | $2,279 |
| Property tax | $310 |
| Subject carrying costs | $2,589 |
| Rent offset at 75% of $2,250 | −$1,688 |
| Shortfall carried into TDS | $901 |
The full TDS, across the whole portfolio
The six existing doors don't add new liability to this calculation: each nets to zero or better at this lender's own review, so only the seventh property's shortfall, plus her own housing, lands in TDS.
| TDS line | Monthly |
|---|---|
| Own housing (P&I + tax) | $2,450 |
| Seventh-property shortfall | $901 |
| TDS vs. income of $11,833 | 28.3% |
The solution
A RECA-licensed mortgage associate did what the first bank's policy made impossible: found a lender whose rental-portfolio appetite is not capped at six doors.
First, confirmed the decline was a door-count policy, not a ratio problem, by re-running the seventh property's own numbers before shopping it anywhere — there was no point pitching a clean file to another lender carrying the same low cap.
Second, placed the file with a lender whose internal appetite runs well past six doors, applying a 75% offset against the seventh property's own carrying costs, and packaged proof that all six existing doors are current and self-supporting.
Knowing each lender's rental-portfolio appetite matters just as much as knowing its rental-offset percentage — both are lender policy, and both are invisible until a file is actually shopped.
The outcome
Funded uninsured at 75% LTV on the seventh property, the six existing doors untouched. Alberta charges no land transfer tax; the registration fees due at closing are set by the Land Titles Office on its own sliding scale, paid alongside legal fees — the number that decided this file was the ratio, not the closing costs.
What to take from this file
- 01A decline can be about door count, not debt service. Confirm which it is before re-running ratios anywhere else.
- 02Know each lender's rental-portfolio appetite the way you'd know its offset percentage — both are policy, not regulation.
- 03Existing rentals that already carry themselves don't have to reappear in TDS math on a new file, provided the lender's review confirms each is current.
- 04Uninsured rental financing is tested against the lender's own ceiling, not CMHC's insured caps.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸CMHC — CMHC Reviews Underwriting Criteria — GDS 39% / TDS 44% maximums and the 600 credit-score floor for insured files.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸5.65% contract rate — rates move daily; not a quote.
- ▸a 6-door internal portfolio cap and a 75% rental offset — both are lender policy, not regulation, and vary by institution.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.