Yes. Canadian lenders will count rental income when you apply for a mortgage, and it can make a real difference to how much you qualify for. How much of the rent counts depends on the lender, the property, and whether the unit is legal. Most lenders use somewhere between 50 and 100 percent of it.
Lenders handle rental income in one of two ways. The offset method subtracts the rent from your housing costs before calculating your GDS and TDS ratios. The add-back method takes a percentage of the rent, often 50 to 80 percent, and adds it to your gross income instead. The method matters. On the same property, the gap between a 50 percent add-back and a full offset can move your qualifying amount by tens of thousands of dollars, so ask any lender which approach they use before you compare rates.
The strongest case is an owner-occupied home with a legal second unit. For insured mortgages, CMHC will consider up to 100 percent of the gross rent from a two-unit owner-occupied property, provided the suite is self-contained and the borrower has strong credit, generally a score of 680 or higher. In Toronto that usually means a house with a legal basement apartment. Legality is the gate. Rent from an illegal suite is income most lenders will not touch, no matter how reliably it arrives.
If the unit is vacant when you buy, you will not have a rent history to show. Lenders typically rely on the appraiser's estimate of market rent or a signed lease rather than your own projection.
For a rental property you will not live in, most lenders count roughly 50 percent of the rent, and you carry the housing costs of your own residence on top of it. Federal rules that took effect in 2026 also require banks to apply stricter treatment when rent makes up more than half of the income used to qualify, so heavily rent-dependent applications face tighter terms than they did a few years ago.
For a first buyer in Toronto, the practical takeaway is simple. A house with a legal suite is not just a property with extra income. It is a property that lets you borrow against that income, which can pull homes into reach that your salary alone would not support.
Related reading: How Much Income Do You Need to Buy a Home in Toronto?, How Much of a Down Payment Do You Need for a Rental Property in Canada?, and What Is Mortgage Default Insurance in Ontario?