What is Rental Offset in Canadian mortgages?
The portion of rental income a lender will apply to reduce the subject property's housing costs in GDS/TDS calculations. Typically 50-80% of gross rental income. Improves qualifying ratios for investment properties.
How is Rental Offset calculated?
Offset = Gross Rental Income × Offset % (e.g., 50-80%)
Rental Offset example
Worked example
Property rents for $2,400/month. Lender uses 50% offset = $1,200/month reduces GDS/TDS.