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.

How Adjusting Your Mortgage Payment Frequency Can Save You Time and Money

Mortgage Tips Craig Barton 24 Mar

How Adjusting Your Mortgage Payment Frequency Can Save You Time and Money

When it comes to paying off your mortgage, small changes can lead to big savings. One of the simplest yet most effective strategies to cut down on your mortgage’s amortization period (the time it takes to fully repay your loan) is adjusting your payment frequency. By making more frequent payments, you can pay off your home loan faster and reduce the amount of interest you pay over time.

Let’s break down how this works and why it benefits you as a homeowner.

Understanding Mortgage Payment Frequency Options

Most lenders offer several different payment schedules:

  1. Monthly Payments: One payment per month (12 payments per year).

  2. Biweekly Payments: Half of your monthly payment every two weeks (26 payments per year).

  3. Accelerated Biweekly Payments: Half of your monthly payment every two weeks, but with the equivalent of one extra full payment per year.

  4. Weekly or Accelerated Weekly Payments: Payments every week, with an accelerated option to reduce amortization faster.

While monthly payments are the standard, opting for a more frequent payment schedule can significantly shorten your mortgage term and reduce interest costs.

How Does Changing Your Payment Frequency Help?

1. Paying More Often Reduces Interest Costs

Interest on your mortgage accumulates daily or monthly, depending on your loan agreement. The more frequently you make payments, the less time interest has to build up. This means more of your payment goes toward reducing the principal rather than just covering interest.

2. Accelerated Payments Cut Down Your Amortization

Switching to an accelerated biweekly payment schedule is one of the best ways to shorten your mortgage term. Since there are 52 weeks in a year, biweekly payments mean 26 half-payments per year—which actually equals 13 full payments instead of 12. That extra payment each year directly reduces your principal, helping you pay off your mortgage faster.

For example, if you have a 25-year mortgage, making accelerated biweekly payments instead of monthly payments could help you pay it off in 22 years or less—potentially saving you thousands in interest.

3. Builds Financial Discipline and Equity Faster

Making smaller, more frequent payments can make budgeting easier and help you build home equity more quickly. Since more of your payments go toward reducing your principal, you’ll own a larger percentage of your home in a shorter time. This is especially beneficial if you plan to sell or refinance in the future.

Real Savings Example

Let’s say you have a $300,000 mortgage with a 25-year amortization at an interest rate of 5%.

  • Monthly payments: ~$1,745 per month

  • Biweekly payments (non-accelerated): ~$873 every two weeks

  • Accelerated biweekly payments: ~$872 every two weeks (but results in an extra full payment each year)

By switching to accelerated biweekly payments, you could pay off your mortgage 3–4 years earlier and save tens of thousands in interest over the life of your loan.

How to Change Your Mortgage Payment Frequency

  1. Contact Your Lender – Most lenders allow you to change your payment frequency with little to no cost.

  2. Choose the Best Option for Your Budget – If you can afford accelerated payments, they offer the most savings.

  3. Automate Your Payments – Setting up automatic payments ensures you stay on track without the hassle of manual transfers.

Final Thoughts: A Simple Change for Big Savings

Adjusting your mortgage payment frequency is a small but powerful strategy that can help you become mortgage-free faster and save thousands in interest. Whether you choose biweekly, weekly, or accelerated payments, the key takeaway is that more frequent payments reduce the amount of interest you pay and shorten your amortization period.

If paying off your home sooner and keeping more money in your pocket sounds good to you, it’s time to explore your payment options and start making your mortgage work for you!

Mortgage Portability

Mortgage Tips Craig Barton 15 Jul

When it comes to getting a mortgage, one of the more overlooked elements is the option to be able to port the loan down the line.

Porting your mortgage is an option within your mortgage agreement, which enables you to move to another property without having to lose your existing interest rate, mortgage balance and term. Thereby allowing you to move or ‘port’ your mortgage over to the new home. Plus, the ability to port also saves you money by avoiding early discharge penalties should you move partway through your term.

Typically, portability options are offered on fixed-rate mortgages. Lenders often use a “blended”system where your current mortgage rate stays the same on the mortgage amount ported over to the new property and the new balance is calculated using the current interest rate. When it comes to variable-rate mortgages, you may not have the same option. However, when breaking a variable rate mortgage, you would only be faced with a three-month interest penalty charge. While this can range up to $4,000-$6000, it is much lower than the average penalty to break a fixed mortgage. In addition, there are cases where you can be reimbursed the fee with your new mortgage.

If you already have the existing option to port your mortgage, or are considering it for your next mortgage cycle, there are a few considerations to keep in mind:

1. Timeframe: Some portability options require the sale and purchase to occur on the same day. Other lenders offer a week to do this, some a month, and others up to three months.

2. Terms: Keep in mind, some lenders don’t allow a changed term or might force you into a longer term as part of agreeing to port you mortgage.

3. Penalty Reimbursements: Some lenders may reimburse your entire penalty, whether you are a fixed or variable borrower, if you simply get a new mortgage with the same lender –replacing the one being discharged. Additionally, some lenders will even allow you to move into a brand-new term of your choice and start fresh. Keep in mind, there can be cases where it’s better to pay a penalty at the time of selling and get into a new term at a brand-new rate that could save back your penalty over the course of the new term.

Understanding Mortgage Rates

Mortgage Tips Craig Barton 12 Jul

While not the only factor to look at when choosing a mortgage, interest rates continue to be one of the more prominent decision criteria with any mortgage product. Understanding how mortgage rates are determined and the differences between your typical fixed-rate and variable-rate options can help you make the best decision to suit your needs.

FIXED-RATE VS. VARIABLE-RATE

Fixed-Rate Mortgage

First-time homebuyers and experienced homebuyers typically love the stability of a fixed rate when just entering the mortgage space. The pros of this type of mortgage are that your payments don’t change throughout the life of the term. However, should the Prime Rate drop, you won’t be able to take advantage of potential interest savings.

Variable-Rate Mortgage

As mentioned, variable-rate mortgages are based on the Prime Rate in Canada. This means that the amount of interest you pay on your mortgage could go up or down, depending on the Prime. When considering a variable-rate mortgage, some individuals will set standard payments (based on the same mortgage at a fixed-rate). This means that, should Prime drop and interest rates lower, they would end up paying more to the principal as opposed to paying interest. If the rates go up, they simply pay more interest instead of direct to the principal loan. Other variable-rate mortgage holders will simply allow their payments to drop with Prime Rate decreases, or increase should the rate go up. Depending on your income and financial stability, this could be a great option to take advantage of market fluctuations.