Partial Interest Mortgage
March 9, 2025 | Posted by: Alex Vinarski
What is a Partial Interest Mortgage? If you co-own a property and need to access funds without involving the other owner, a partial interest mortgage (also called a 'half interest mortgage' or 'tenants in common mortgage') might be the perfect solution. This unique financing option allows you to borrow against your share of the property, even if you’re not the sole owner. Here’s how it works:
How Does a Partial Interest Mortgage Work?
- Ownership Stake: If you own a portion of a property (e.g., 50%), you can secure a loan against your share.
- Borrowing Limit: You can typically borrow up to 65% of your share’s value without requiring the other owner’s signature.
- Tenants in Common: The mortgage is registered as tenants in common, meaning you retain individual ownership of your share.
- No income verification. As half interest mortgages done by the private lenders, they don’t require income verification.
Key Considerations
- Higher Rates: Partial interest mortgages typically have higher interest rates due to the increased risk for lenders.
- Exit Strategy: Plan how you’ll repay the mortgage, whether through refinancing, selling your share, or other means.
- Appraisals: Normally lenders require appraisal for all private mortgage, but in some cases we can use BC Assessment value or drive by appraisal, without appraiser visiting the property.
Half interest mortgage calculator based on 65% Loan to Value:
- Home is valued at $800,000
- There is a conventional mortgage of $300,000 with both parties on the name of this mortgage
- 50% of home value is $400,000
- 50% of mortgage is $150,000
- our 65% x $400,000 = $260000 – $150,000 your half of the mortgage = 110,000 available to borrow from home equity (conditions apply)
Call to Action:
Interested in learning more about partial interest mortgages? Contact me today at 604-722-0203 or visit www.ipotekcacanada.com to explore your options.
I have done quite a few half interest mortgages.
