An Investment Loan (or Investment Mortgage) is taken out when buying a property which is either non-owner occupied or partially owner occupied with the intention of earning an income from the entire property or a portion of that property.
If you are buying a duplex as an investment, this can sometimes be a personal loan and not an investment loan depending on what your financial lender is offering.
Quick facts about investment only loans:
- Higher interest rate is generally applicable
- Loan term for larger investment loans can qualify for a maximum of 30-35 years
- Mortgage insurance is generally applicable to all investment loans and starts at around 2.5% of the loan amount for a 25 year mortgage.
- If you are buying a plex which has more than 5 doors, you will need to take out a commercial loan.
Below is an estimated rate of expected mortgage insurance you will be paying depending on the down payment, term of loan and occupancy status of the investment property purchased.
Mortgage Default Insurance: Owner-Occupied Investment Properties (1+ Unit)
Mortgage Default Insurance: non-owner occupied property