Mortgage financing for short-term rentals, including Airbnb, is much more limited than long-term rentals
Most major banks do not like Airbnb properties and often require long-term rental qualification
Airbnb income is frequently discounted or ignored by lenders
Even private and alternative lenders can be restrictive and more expensive
Zoning, condo rules, and a long-term rental backup plan are critical
Citadel Mortgages helps investors structure realistic, lender-approved solutions
Short-term rental properties, such as those listed on Airbnb and Vrbo, offer lucrative income potential. However, securing financing for these properties often comes with unique challenges. Citadel Mortgages specializes in tailored mortgage solutions for short-term rental properties, ensuring you can capitalize on this growing market.
Whether you’re a first-time homebuyer, refinancing, or renewing your mortgage, understanding current trends and available options helps you make informed financial decisions.
This guide focuses on helping you navigate the Canadian mortgage market, offering insights into current rates, strategies for securing the best deal, and regional trends.
Mortgage brokers play a pivotal role in helping Canadians find tailored financing options, providing expert advice, and navigating the often complex mortgage market.
For more detailed information on mortgage types, costs, and rights, consult the Government of Canada – Financial Consumer Agency of Canada (FCAC).
A short-term rental mortgage is designed specifically for properties used as short-term rental accommodations, such as Airbnb or Vrbo. These loans consider unique income structures and property uses, ensuring that landlords and investors can secure financing while meeting lender requirements.
Learn more about today’s best mortgage rates in Canada.
| Feature | Details |
|---|---|
| Maximum Loan-to-Value (LTV) | Up to 75% of the property’s appraised value. |
| Rental Income Validation | Based on market rent or an average of the past two years’ gross rental income. |
| Documentation Required | Personal Income Tax Returns (PITR) with Statement of Rentals (T776 or TP-128-V). |
| Rental Offset | 80% of rental offset applied to income calculations. |
| Area/Building Validation | Must confirm that the property area or building permits short-term rentals. |
| Metric | 1-Year Fixed | National Average |
|---|---|---|
| Average Rate (2024) | 5.75% | 5.50% – 6.50% |
| Typical Loan Size | $360,000 | $390,000 |
| Approval Time | 3–5 Business Days | 3–7 Business Days |
Using a mortgage broker that has access to some of the lowest mortgage rates in Canada, is key to ensure you have the best approval rate.
Diversified Income Stream
Flexible Financing Options
Maximized Borrowing Power
Lucrative Investment Potential
Income Verification
Property Validation
Down Payment
Creditworthiness
We compare mortgage rates from top lenders, including BMO mortgage rates, CIBC mortgage rates, RBC mortgage rates, TD Bank Mortgage Rates, and MCAP mortgage rates, alongside our exclusive Citadel Smart Home Plan mortgage rates. Let us simplify the process and help you secure approval quickly and stress-free!
There are significantly fewer lenders willing to finance properties intended for short-term rental use.
Most major banks:
Do not like Airbnb or short-term rental properties
Will often require the property to qualify as a long-term rental on paper
May ignore Airbnb income entirely
Can change policy without notice
As a result, many approvals depend on whether the property:
Is legally permitted for short-term rental use
Could be rented as a long-term rental if required
Meets conservative rental underwriting standards
Many investors assume private lending is a fallback option — but even private lenders can be restrictive with Airbnb properties.
Private and alternative lenders may:
Require higher down payments
Offer lower loan-to-value limits
Charge higher interest rates and fees
Demand a clear exit strategy
Apply conservative appraisals
💡 Short-term rental exposure increases perceived risk, even outside traditional banking.
Lenders focus heavily on:
Municipal zoning and short-term rental bylaws
Condo corporation rules (where applicable)
Backup long-term rental viability
Income stability and borrower strength
Exit strategy if short-term rules change
💡 Cities can — and do — change short-term rental regulations. Lenders price this risk in.
Property Type: Condo approved for short-term rentals
Purchase Price: $900,000
Intended Use: Airbnb
Down Payment: 25–30%
Citadel Mortgages structures the file based on:
Verified zoning and condo compliance
Conservative income assumptions
Lender-approved rental treatment
A viable long-term rental fallback
✅ Result: Financing secured without relying on aggressive Airbnb income projections.
We do not sell Airbnb mortgages as “easy” — because they are not.
Instead, we:
Review zoning and condo bylaws upfront
Confirm lender appetite before offers are firm
Structure deals conservatively
Ensure backup rental strategies are in place
Set realistic expectations from day one
This approach reduces the risk of late-stage declines and financing surprises.
| Risk | Why It Matters |
|---|---|
| 🏦 Lender Policy Risk | Rules change quickly |
| 🏙️ Municipal Regulation Risk | STR permissions can be revoked |
| 📉 Income Volatility | Seasonal demand fluctuations |
| 💰 Financing Cost | Often higher than standard rentals |
| 🔁 Exit Risk | Long-term rental fallback is essential |
Short-term rentals require flexibility, capital, and risk tolerance.
Airbnb and short-term rental properties can be financed, but:
Options are limited
Rules are stricter
Income is treated conservatively
Private lending is not guaranteed
💡 Success comes from proper structuring, not optimistic assumptions.
Yes, lenders often allow projected market rents or verified income from PITR to calculate loan eligibility.
No, it’s essential to confirm local zoning laws and building regulations to ensure short-term rentals are permitted.
Yes, refinancing options are available to leverage your equity for other investments.
Yes, lenders typically use 80% rental offset for short-term rental income calculations.
Short-term rentals offer incredible income potential, but financing them requires specialized mortgage solutions. With the Citadel Mortgages Short-Term Rental Program, you can secure competitive rates, flexible terms, and expert guidance tailored to your needs. Whether you’re managing an Airbnb in a bustling city or a Vrbo property in a serene getaway location, our team is here to make the financing process seamless.
At Citadel Mortgages, we specialize in helping Canadians navigate the complexities of mortgage rates and terms. Whether you’re looking for a 6-month fixed rate, a 5-year variable, or something in between, our team is here to provide personalized guidance and access to the best rates in Canada.
At Citadel Mortgages, we pride ourselves on offering expert, client-focused mortgage solutions that stand out in the industry. Here’s why you should choose us:
Our mortgage brokers are licensed and certified across multiple provinces, providing exceptional advice and service tailored to your unique needs. Our mortgage brokers are committed to delivering the highest standards of professionalism and expertise.
Unlike traditional commission-based models, our mortgage agents are evaluated based on client satisfaction and the quality of their advice. This ensures that you receive impartial guidance on the best mortgage options for your situation.
Citadel Mortgages offers competitive rates that help you save money over the life of your mortgage. Our team works diligently to find the most favorable terms to suit your financial goals.
We are dedicated to transforming the mortgage industry by offering a transparent, seamless process. Our 100% digital platform ensures that you can manage your mortgage application from start to finish with ease and confidence.
At Citadel Mortgages, our mission is to provide a positive, empowering, and transparent property financing experience. We simplify the mortgage process to make it as straightforward and stress-free as possible.
For personalized advice and the best mortgage rates in Toronto, contact our licensed and knowledgeable mortgage experts at Citadel Mortgages.