Short answer
Rental income is not handled by one universal percentage. Many A lenders use conservative add-back or offset worksheets; alternative/B lenders may recognize more rental cash flow; MIC and private decisions can place more weight on equity, property and the exit strategy.
Why this question matters
The client is declined after one worksheet and believes the portfolio is “overqualified.” In practice, the same rents, mortgages and taxes can produce a different result under another lender’s documented policy.
What the official rule or guidance says
OSFI requires federally regulated lenders to maintain prudent underwriting and due diligence, but individual lenders set their income-verification and rental calculations. Industry practice—not a regulator rule—often includes about 50% gross-rent add-back at some A lenders; some alternative lenders may use roughly 80% add-back on a subject rental or 90–95% offset on a non-subject rental.
What this does not mean
Those percentages are examples, not promises or market-wide rules. Legal units, leases, market-rent reports, tax returns, expenses, vacancies, property type, credit and total portfolio exposure can change the treatment. MIC/private flexibility normally carries higher cost and requires a credible exit.
A practical Ontario example
Illustration only: An investor’s non-subject rental shows a $2,800 payment and $3,000 rent. A conservative add-back calculation may hurt ratios, while an alternative offset method may recognize most of the rent against the carrying cost. Approval still depends on the rest of the file.
Practical next steps
Build one property schedule showing rent, mortgage, taxes, heat, condo fees, ownership and documents. Compare A first, then B if the policy—not affordability—is the obstacle. Use MIC/private financing only when the timing, equity and exit back to A/B or sale justify the total cost.
Questions to ask before relying on the answer
- Is this an insurer, tax, legal, regulator or individual lender rule?
- Does it apply to an insured, insurable or uninsurable mortgage?
- How will the lender document and calculate the rent on this exact property?
- Which facts are confirmed, and which are still assumptions?
- What is the lowest-cost workable path through A, alternative/B, MIC or private lending?
Rajiv’s broker perspective
Rental files should be tested, not guessed. I would separate the legal and tax questions from the mortgage calculation, prepare one clean property schedule and then compare suitable lender policies. A strong result is not simply the largest approval—it is a mortgage the client can carry through vacancy, repairs, renewal and a realistic exit.
Related: Mortgage Knowledge Centre · Real Estate Centre · Updates & Rules Centre
Want the rental file tested before you make a decision?
Bring the property numbers, current mortgages and income documents. Rajiv can compare the practical A, alternative/B, MIC and private paths and identify which questions need an accountant or lawyer.