CMHC just introduced 100% financing for 1 and 2 unit rental properties. Also 90% financing for 3-4 unit properties. See product announcementWhat is amazing about this loan insurance is the premium they charge- 7.25% for 100% financing. This will get tacked onto the loan amount so in essence you are borrowing 107.25%. This is available in combination with other products such as 40-year amortization, self-employed and new to Canada programs.
Lets assume an investor took a 100% loan amortized over 40 years for a full duplex costing 500K. Adding the 7.25% premium of $36,250 the investor takes a loan for 536,250. Using an amortization table it would take over 10 years just to pay the premium! I assumed an interest rate of 7% and first payment Jan 2008.
| Year | Loan Balance | Yearly Interest Paid | Yearly Principal Paid | Total Interest |
| 2008 | 533,718.19 | 37,457.29 | 2,531.81 | 37,457.29 |
| 2009 | 531,003.36 | 37,274.27 | 2,714.83 | 74,731.57 |
| 2010 | 528,092.27 | 37,078.01 | 2,911.09 | 111,809.58 |
| 2011 | 524,970.74 | 36,867.57 | 3,121.53 | 148,677.15 |
| 2012 | 521,623.55 | 36,641.92 | 3,347.19 | 185,319.07 |
| 2013 | 518,034.40 | 36,399.95 | 3,589.16 | 221,719.02 |
| 2014 | 514,185.78 | 36,140.49 | 3,848.62 | 257,859.50 |
| 2015 | 510,058.95 | 35,862.27 | 4,126.83 | 293,721.77 |
| 2016 | 505,633.79 | 35,563.94 | 4,425.16 | 329,285.72 |
| 2017 | 500,888.73 | 35,244.05 | 4,745.06 | 364,529.76 |
| 2018 | 495,800.66 | 34,901.03 | 5,088.08 | 399,430.79 |
The funny thing is the renters of this property would be expected to pay security deposit and one months rent to a landlord with absolutely no stake whatsoever.
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