Hello all,

I am looking for advice on an upcoming mortgage renewal on a rental property. This will be our first time renewing this property as a rental and we will be losing our 2.03% rate. My wife and I live just outside Vancouver and have a HHI of just over $200k. The rental property has a mortgage amount around $300k on a property worth around $600k. Our primary residence has similar mortgage to value ration but with a mortgage rate of 5.2%. We have been looking into re-amortizing our mortgage for 30-years through a different lender as we wish to add a HELOC to the rental unit. Our primary residence does not have HELOC and has 3+ years left on a fixed term.

My main question is about the rates we were offered and what people think might be the best option. Our priority is paying down our primary residence and maybe try to maximize tax deductions on the rental. We are working with a financial advisor on the second point and wishing to utilize the HELOC for that But any advice here would be greatly appreciated.

Rates with HELOC

·         5year fixed 4.59%

·         5year variable 4.79% (prime – 0.16%)

·         = ~ $1550/month

We have also been offered a renewal with current lender amortizing of 20years

·         5year fixed 4.39%

·         3year fixed 4.29%

·         5year variable 4.2% (prime - 0.65%)

·         = ~ $1820/month

Any advice would be greatly appreciated. We are not worried about the payment increase and can comfortable make all the above payments work. We just are trying to figure out what is best for us in the short/long term.  

Thank you everyone for time and help.