Thinking of Buying a Second Property in BC? Here’s What You Need to Know

Mortgage Tips Craig Barton 25 Aug

Thinking of Buying a Second Property in BC? Here’s What You Need to Know

As a mortgage broker here in beautiful British Columbia, one of the questions I get asked more and more is:
“Can I afford to buy a second property?”

Whether it’s for a vacation home, a rental investment, or a place for a family member, purchasing a second property can be an exciting financial move—but it’s not without its complexities. In this blog post, I’ll walk you through what you need to consider before taking the plunge, how lenders view second property purchases, and some key strategies to make it work.

1. Know Your “Why” – It Changes Everything

Not all second properties are treated equally in the eyes of lenders. Your intended use can impact your mortgage options:

  • Vacation Home / Second Residence: If you plan to use it personally (and not rent it out full-time), most lenders will treat this similarly to your primary residence.

  • Rental Property: If your goal is to earn rental income, lenders will apply different criteria—often stricter—since it’s considered a higher-risk mortgage.

  • Multi-Generational Housing: Buying for a child, parent, or other relative? Some lenders may allow flexibility depending on the arrangement.

Clarifying your purpose early on helps us tailor your mortgage strategy from the start.

2. Do You Qualify for a Second Mortgage?

This is the make-or-break question. Here’s what lenders will be looking at:

  • Equity in Your Current Home: In many cases, homeowners use the equity in their existing property as a down payment on the second one—either through a HELOC (Home Equity Line of Credit) or refinancing.

  • Your Debt Ratios: Lenders will want to ensure you can comfortably carry two mortgages. We’ll look at your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios.

  • Credit Score & Income Stability: Strong credit and steady income are crucial when applying for any additional financing.

If you already own one property, you’re likely familiar with some of this—but buying a second home often means navigating more layers of scrutiny.

3. Down Payment Requirements

Here’s the short version:

  • Second Home (personal use): Minimum down payment is typically 5-10%, depending on the purchase price.

  • Rental Properties: Lenders usually require 20% down, and mortgage default insurance (like CMHC) is not available.

One strategy I help clients explore is tapping into existing home equity to fund the down payment—especially if you’re sitting on a property that has appreciated significantly in the BC market over the past few years.

4. Don’t Forget Closing Costs, Taxes & Insurance

Beyond the mortgage, consider the additional costs:

  • Property Transfer Tax (with limited exemptions)

  • Legal fees, appraisals, inspections

  • Insurance (especially if the second home is in a rural or remote area)

  • Ongoing maintenance and utilities

For rental properties, don’t forget to factor in vacancies and potential repairs as part of your budget.

5. Consider Rental Income as Part of the Picture

If your second property will be a rental, good news: many lenders will count a portion of the rental income toward your qualifying income. Typically, 50–80% of the projected rent can be added, depending on the lender and whether you have a lease in place.

This can make a big difference in your approval odds—and it’s something we can model for you before you even make an offer.

6. Work With a Mortgage Broker Who Knows the BC Market

Buying a second property is a big move, but with the right plan in place, it’s more accessible than many people think. As a mortgage broker, I work with dozens of lenders—not just the big banks—to help you find the right fit for your goals, whether you’re buying in Vancouver, Kelowna, the Gulf Islands, or anywhere in between.

I’ll help you:

  • Evaluate your equity and borrowing power

  • Compare mortgage products from multiple lenders

  • Understand the tax and insurance implications

  • Structure your financing for both short- and long-term success

Ready to Explore Your Options?

If buying a second property is on your radar, let’s talk. A quick mortgage pre-assessment can show you what’s possible—and prevent surprises down the road.

👉 Book a free consultation with me today, and let’s build a mortgage strategy that helps you reach your next milestone.

Author: Craig Barton, BC Mortgage Broker
Helping homeowners and investors make smart, confident moves in real estate.

Understanding Property Transfer Tax in B.C. — And How You Might Avoid Paying It

General Craig Barton 9 Jul

Understanding Property Transfer Tax in B.C. — And How You Might Avoid Paying It

As a mortgage broker here in beautiful British Columbia, one of the most common surprises I see for first-time homebuyers and even experienced buyers is the Property Transfer Tax (PTT). It’s not a small fee, and it’s important to know how it works—and more importantly—whether you might be eligible for an exemption.

Here’s a breakdown of what you need to know:

What Is Property Transfer Tax?

When you purchase or gain an interest in property in B.C., the provincial government charges a Property Transfer Tax. This is not the same as your annual property tax. Instead, it’s a one-time tax paid when a property’s title is legally transferred to your name.

The Basic PTT Rates in B.C.:

  • 1% on the first $200,000 of the purchase price

  • 2% on the portion between $200,000 and $2,000,000

  • 3% on the portion over $2,000,000

  • An additional 2% on the portion over $3,000,000 (if the property is residential)

Example:

For a $750,000 home:

  • 1% on the first $200,000 = $2,000

  • 2% on the next $550,000 = $11,000

  • Total PTT = $13,000

That’s a significant chunk, especially when you’re already covering your down payment, closing costs, and moving expenses.

Who Might Be Exempt From Paying PTT?

Luckily, there are a few key exemptions, especially for first-time homebuyers and those buying newly built homes. Here’s a summary of the main ones:

1. First Time Home Buyers’ Exemption

If you’re purchasing your first home, you may qualify for a full or partial exemption.

To qualify:

  • You must be a Canadian citizen or permanent resident.

  • You’ve never owned a principal residence anywhere in the world.

  • You’ve lived in B.C. for at least 12 consecutive months immediately before the date of registration, or filed at least 2 income tax returns in B.C. in the last 6 years.

  • The home’s fair market value must be $835,000 or less (as of 2024).

  • The land must be 0.5 hectares (1.24 acres) or less.

💡 Partial exemption applies for homes between $835,000 and $860,000.

2. Newly Built Home Exemption

Buying a newly built home (including condos and townhouses) may also qualify you for a PTT exemption.

Requirements:

  • The home must be brand new or substantially renovated.

  • The purchase price must be $1,100,000 or less (as of 2024).

  • You must move into the home and live there as your principal residence.

  • The home must be 0.5 hectares or smaller.

💡 Partial exemptions apply for homes priced between $1,100,000 and $1,150,000.

3. Other Exemptions

Some other situations where PTT may be waived or reduced:

  • Transfer between family members due to inheritance or divorce

  • Transfers related to a marriage breakdown

  • Certain transfers involving First Nations individuals or band land

  • Transfers to a registered charity

How Do You Claim an Exemption?

When you’re closing on a property, your lawyer or notary will prepare the documents to register your title with the Land Title Office. If you’re eligible for an exemption, they’ll file the necessary paperwork at that time.

I always recommend working with a professional who’s familiar with the details—they can ensure you don’t miss out on a potential tax break.

Final Thoughts

Property Transfer Tax is one of those things that can sneak up on buyers if they’re not prepared. As a mortgage broker, part of my job is to make sure you understand all the costs of buying a home—not just your mortgage payment.

If you’re thinking of buying in B.C. and want to find out if you qualify for a PTT exemption, feel free to reach out. I’m always happy to run the numbers with you and help make sure you’re taking advantage of every possible incentive available.

Have questions about your mortgage options or planning to buy your first home in B.C.? Contact me for a free consultation.

Understanding the details of Mortgages

General Craig Barton 17 Jul

When it comes to mortgages, it can be easy to get overwhelmed by the sheer number of options! Fortunately, we are here to help! Below are some of the mortgage details that you should understand to ensure that you are getting the best mortgage for you:

INTEREST RATE TYPE Interest rate is one of the major components to your mortgage and it is important to decide whether you want a fixed-rate, variable-rate or protected (capped) variable-rate mortgage.

A fixed-rate mortgage is ideal for new home owners or those on a fixed income who are more comfortable with a stable monthly payment.

A variable-rate mortgage is ideal for individuals who have room in their budget and want to take advantage of potential interest rate drops – keep in mind, with this mortgage you pay more if the rates go up! Lastly, the protected (capped) variable-rate mortgage operates similarly to variable-rate, except with a maximum (or capped) rate allowing you to take advantage of interest rate decreases while never paying above a set amount should the rates rise.

AMORTIZATION This is the life of your mortgage and is typically a 25-years period whereby you would pay off the entirety of the loan. You can choose a shorter term, which would result in higher payments but allow you to pay less interest over the lifetime of your mortgage and be mortgage-free faster!

PAYMENT SCHEDULE This is the frequency that you make mortgage payments and ranges from monthly to bi-monthly, bi-weekly, accelerated bi-weekly or even weekly payments. There are many great calculators on My Mortgage Toolbox app (available through Google Play and the iStore) that can help you calculate and compare these payment schedules to see what works best for you.

MORTGAGE TERM The standard mortgage term is 5-years and refers to the length of time for which options are chosen and agreed upon, such as the interest rate. When the term is up, you have the ability to renegotiate your mortgage at the interest rate of that time and choose the same or different options.

OPEN VS. CLOSED Open mortgages give you the option to increase mortgage payments or make lump sum deposits on your loan. A closed mortgage does not allow additional payments without penalties.

HIGH RATIO VS. CONVENTIONAL A conventional mortgage is where you put the standard 20% down on your home. However, as not everyone is able to do this, many buyers will end up with a high-ratio mortgage product. High-ratio mortgages need to be insured due to financial institutions only being allowed to lend up to 80 percent of the homes purchase price WITHOUT mortgage default insurance. Therefore, if you choose a high-ratio mortgages over a conventional one, you will pay a monthly insurance premium.