BRRRR calculator for Canada

BRRRR calculator

Cash you put in = down payment + land transfer tax and closing costs + rehab + the mortgage and holding costs until the refinance + the refinance costs. Cash back = the new mortgage (the lender's share of the value after repairs) minus what's left on the purchase mortgage. Whatever isn't returned is cash left in the deal, and the year-1 cash flow divided by it is your cash-on-cash return. Change "Finding tenants" to see what a leasing agent's one month's rent does to the numbers.

The BRRRR method in 5 steps

1. Buy a property below what it will be worth once fixed, with at least 20% down: a rental purchase needs it.
2. Rehab it: the repairs that raise its value and the rent the most.
3. Rent it to a tenant on Ontario's Standard Form of Lease.
4. Refinance at the new appraised value. The new mortgage pays off the purchase mortgage, and the rest comes back to you.
5. Repeat: put the cash you got back into the next property.

A worked example

A duplex bought for $500,000 with 20% down, $80,000 of repairs over 4 months, appraised at $700,000 afterwards, refinanced at 80%, and rented for $4,800 a month (the calculator's starting numbers):

How much will a lender refinance in Canada?

Usually up to 80% of the appraised value. The Bank Act bars a bank from making or refinancing a residential mortgage above 80% of the property's value unless it's insured (Bank Act, s. 418), and OSFI's Guideline B-20 holds federally regulated lenders to it, with a home equity line of credit limited to 65% of the value. Credit unions are regulated by the province and set their own rules.

Insurance doesn't stretch a small rental past 80%: CMHC's Income Property insurance for 2-to-4-unit rentals also stops at 80% of the value. For buildings of 5 units or more, CMHC's MLI Select can lend a higher share of the value over a longer amortization, depending on points for affordable rents, energy efficiency and accessibility. Set the calculator's "lender lends" figure to what your lender quotes.

Breaking the purchase mortgage

Refinancing before the purchase mortgage's term ends usually means a prepayment penalty: for most mortgages the higher of three months' interest or the interest rate differential (Financial Consumer Agency of Canada). Ask what it would be before you buy, and add it to the calculator's refinance costs. Ask too how soon the lender will use the new appraised value rather than what you paid.

Ontario costs that change the numbers

• Land transfer tax on the purchase, doubled in the City of Toronto, which adds its own (the calculator works it out; see the land transfer tax calculator).
• Holding costs while it's empty: mortgage payments, property tax, insurance, utilities. Every extra month of rehab costs money.
• Rent increases for a sitting tenant: if the building was first lived in on or before November 15, 2018, Ontario caps yearly raises at the guideline (2.1% in 2026). Between tenants you set the rent yourself.
• Finding tenants: a leasing agent is commonly paid one month's rent plus HST each time; a flat fee MLS® lease listing is from $69.99 a month (see what a realtor charges to lease).

Tax: holding vs selling

The calculator is before income tax. Rental profit is taxed as income: the interest on money borrowed to buy or improve a rental is deductible, principal repayments aren't, and the building's cost can be written off over time as capital cost allowance (CRA, Rental Income guide).

A refinance isn't a sale, so it isn't taxed. If you sell instead of refinancing, CRA's residential property flipping rule treats the profit on a home (including a rental) owned less than 365 consecutive days as fully taxable business income, not a capital gain, unless a life event such as a death, a separation or a job loss caused the sale. This is general information, not tax advice: ask an accountant about your deal.

Is BRRRR right for you?

• It works when the value after repairs is well above the price plus the rehab, and the rent covers the bigger new mortgage.
• It's risky when repairs run over, the appraisal comes in low (less cash comes back) or rates rise before you refinance.
• Compare holding with selling: our rent vs sell calculator and cap rate calculator use the same Ontario costs. Selling after the rehab instead? Try the house flipping calculator.

BRRRR in Canada: questions

Flat fee MLS® prices

Plus 13% HST on Ontario listings; no tax on Alberta listings. The monthly plan can be cancelled any time.

Repeating it? Pay once for your next tenants

Every BRRRR property needs tenants, and then new ones when a lease ends. Buy listing credits in My Account after your first listing: 2 credits save 10%, 3 save 25%. Credits never expire, keep today's price and work on any property, for rent or for sale.

Plus 13% HST on Ontario listings. Codes like FREEUPGRADE don't apply to bundles. Already listed with us? Buy credits in My Account.

For lease right now, listed by landlords like you

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$2,099/mo2-553 Hughson St. N, HamiltonMLS® #X13102212

$3,000/mo135 Colborne Street East, OrilliaMLS® #X13678648

$3,000/mo1230 Benson St, Innisfil BeachMLS® #N13780038

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