When applying for a mortgage, one of the first questions a lender will ask is simple:
“Will you be living in the home?”
If the answer is yes, you’re likely applying for an owner-occupied mortgage—and that can come with important benefits.
Here’s what that means, how it affects your mortgage terms, and why lenders treat it differently from investment or rental property financing.
What Is an Owner-Occupied Mortgage?
An owner-occupied mortgage is a home loan on a property where you, the borrower, plan to live as your primary residence (or in some cases, as your second home).
This includes:
- Detached homes
- Condos
- Townhomes
- Duplexes, triplexes, and fourplexes (if you live in one unit)
If you’re buying a place to rent out to others and don’t live there, it would be classified as a non-owner-occupied or investment property—very different in the eyes of your lender.
Why It Matters to Lenders
Lenders see owner-occupied homes as lower risk than rental or investment properties. That’s because people are generally more likely to keep up with payments on the home they live in.
As a result, owner-occupied mortgages typically come with:
- Lower interest rates
- Lower minimum down payments (as little as 5% with mortgage insurance)
- More flexible terms and amortizations
- Better prepayment options in many cases
What Are the Requirements?
To qualify for an owner-occupied mortgage, you generally need to:
- Live in the home within 60 days of closing
- Use it as your primary residence for the foreseeable future
- Meet typical mortgage qualifications (credit, income, debt ratios, etc.)
If the property has multiple units, you usually need to live in one of them for it to qualify as owner-occupied.
Can I Rent Out Part of My Home?
Yes—and it can actually work in your favour.
If you’re buying a duplex, triplex, or fourplex, living in one unit and renting out the others may still qualify as owner-occupied. Even better? Some lenders will allow a portion of the rental income to be counted toward your mortgage approval.
This can increase your borrowing power and help make the property more affordable.
What If I Move Out Later?
If your situation changes and you move out of the property after living there for a period of time, your mortgage remains valid. However, if you’re planning to move out immediately or never intend to occupy the property, you must disclose that to the lender.
Misrepresenting occupancy status is considered mortgage fraud—and it can have serious consequences.
Thinking About Refinancing Your Owner-Occupied Home?
Refinancing an owner-occupied home is usually easier and more flexible than refinancing an investment property. It’s a good option if you want to:
- Lower your interest rate
- Access equity for renovations, debt consolidation, or other needs
- Switch lenders or mortgage types
You can explore your options using our tools:
Your Home. Your Terms. Your Mortgage Broker.
Whether you’re buying your first home, moving up, or looking to refinance your current mortgage, The Local Broker is here to help you every step of the way—with advice tailored to real Canadians and real-life goals.
Start your mortgage or refinance application today:
https://thelocalbroker.ca/local-broker-mortgage-application/
