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Financing Multiple Rental Properties in Canada

By 360Lending

August 11, 2025

Financing Multiple Rental Properties in Canada

You’ve successfully purchased your first one or two rental properties. You've seen the model work: the rent is coming in, your tenants are paying down your mortgage, and you’re building long-term wealth. You’ve caught the real estate investing bug, and you're ready to scale.

Then, you hit an unexpected wall. You find a fantastic new property, the numbers make perfect sense, and you go back to your trusted bank for another mortgage. But this time, the answer is a firm "no." It's a confusing and frustrating experience. Your income is strong, your credit is excellent, and your existing properties are profitable. Why won't they lend to you anymore?

The answer is likely that you've hit your lender's internal "exposure limit." This is a common roadblock that stops many successful real estate investors in their tracks. This guide will explain why this happens, and provide a strategic, broker-led framework for financing a multi-property portfolio that allows you to overcome this hurdle and continue to scale your investments successfully.

Why Your Bank Stops Lending to You

Understanding why your bank suddenly stops approving your mortgages is the first step to creating a better financing strategy. It's not personal; it's a matter of their internal risk management.

Understanding Lender Exposure Limits

"Exposure" is the total amount of money a single lending institution is willing to lend to one individual or a single group of connected individuals, regardless of their income or credit score. Once you hit that invisible ceiling, they will not lend you any more money for new purchases.

These limits exist to protect the lender. They don't want to be over-exposed to any single person's financial situation. If one investor has ten mortgages with one bank and then defaults, it's a significant loss for that institution. By capping their exposure, they spread their risk across many different borrowers.

The "Door Count" vs. "Dollar Amount"

Lenders typically measure their exposure in one of two ways, and their policies can be very different.

Door Count: Some lenders have a hard cap on the number of properties or "doors" they will finance for one client. For many 'A' lenders, this limit can be as low as 3, 4, or 5 properties. Once you hit that number, their system will not approve you for another mortgage, even if the loan amount is small.

Dollar Amount: Other lenders have a total dollar limit. They might be willing to finance any number of properties, as long as the total mortgage debt you hold with them stays below a certain threshold, for example, $1.5 or $2 million.

The Frustration for Growing Investors

This is a major source of frustration for growing investors. You can have excellent cash flow, significant equity across your portfolio, and a perfect payment history, but still get denied for a great deal simply because you've hit an internal, often unpublished, policy limit at your bank. This is the point where a single-lender strategy completely breaks down.

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The Broker's Solution: Lender Diversification

The key to successfully scaling your real estate portfolio is to follow a golden rule: don't keep all your eggs in one basket. A savvy investor should never place all their mortgages with a single financial institution. This is the core of a sophisticated portfolio financing strategy.

Building Your Personal "Roster" of Lenders

Think of it like building a professional sports team. You don't just want one star player; you need a full roster with a variety of skills to win a championship. As mortgage brokers, we help you build a roster of lenders, each playing a different role in your portfolio's growth.

Your 'A' Lenders: These are the major banks and monoline lenders who offer the best rates. We might strategically place your first two or three properties with different 'A' lenders. Your first property might be with Scotiabank, your second with MCAP, and your third with First National. This uses up a small amount of your capacity with each, but keeps your options open.

Your Credit Unions: We then bring in local Ontario credit unions for your next properties. Credit unions are an excellent resource for investors, as they often have their own separate exposure limits and more flexible, common-sense underwriting guidelines for rental properties.

Your 'B' Lenders: For more complex deals (like multi-unit properties) or once your 'A' lender options have been maximized, we strategically use B-lenders. These lenders specialize in working with real estate investors and are very comfortable with large portfolios, though their rates are slightly higher.

A Proactive, Long-Term Strategy

This is not an accident; it's a deliberate, long-term plan we help you architect from the beginning. By strategically placing each new mortgage with a different lender, we preserve your borrowing capacity across the entire market. This proactive approach is the key to scaling your portfolio from 2 properties to 10 or more. An investor who stays with one bank might get stuck at four properties, while a strategically-advised investor can continue to grow.

Advanced Financing Tools for Your Portfolio

As your portfolio grows, you can also gain access to more sophisticated financing tools that can accelerate your growth even further.

Using a Portfolio HELOC

Once you have a portfolio of several properties with significant equity, some specialized lenders can offer you a portfolio-wide Home Equity Line of Credit. Instead of just having a HELOC on your primary residence, a lender can place a larger HELOC that is secured against two or three of your rental properties. This provides you with a large, flexible source of capital that can be used for down payments on future acquisitions or for renovating existing properties to increase their value and rental income.

The "Cash-Out Refinance" for Acquisitions

This is a cornerstone strategy for scaling. As your properties appreciate in value and your tenants pay down the mortgages, you build equity. A cash-out refinance allows you to tap into that equity. For example, if a property you bought a few years ago now has $200,000 in equity, we can help you refinance it to pull out a portion of that equity as a tax-free lump sum. This capital can then be used as the down payment on your next property, allowing you to continue expanding your portfolio without having to save up a new down payment from your personal income.

The Role of a Holding Company

As you scale, it's wise to discuss the structure of your portfolio with a lawyer and an accountant. Many serious investors choose to purchase their properties within a corporation, often called a holding company. This can offer significant benefits in terms of liability protection and tax planning. Financing properties within a corporation involves a different set of rules, often leaning on "commercial" lending policies, even for residential properties. As brokers, we are experienced in navigating these more complex corporate financing structures.

Scalable Growth as a Real Estate Investor

Hitting a financing wall with your personal bank is not a sign of failure. In fact, it's often a sign of success that proves your investment model works and that you're ready to graduate to a more sophisticated financing strategy.

Scaling a real estate portfolio from a hobby into a business is entirely dependent on a proactive, multi-lender approach. You need a financing partner who understands the entire market, not just the policies of one institution. By strategically diversifying your lenders, you can ensure that when you find your next great deal, you'll have the capital ready to act.

If you're ready to grow your real estate portfolio beyond your first few properties, the conversation needs to change from "getting a mortgage" to "structuring a portfolio." Contact our brokerage today to architect a long-term financing strategy that can match your investment ambitions.

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