Canadian rental investing has an uncomfortable structural feature: the markets everyone wants to own produce the least income. Vancouver and Toronto — the two cities with the strongest long-run price growth — sit at the bottom of the cap rate table, while Saskatoon, which few investors romanticise, sits at the top at a 5.25–5.75% Class A midpoint of 5.50%. That is not a coincidence. It is the same fact viewed from two directions.
Compare your property against every market
The table further down tells you what each Canadian city yields. It cannot tell you where your deal sits, which is the only question that matters when you are holding an offer. Enter the price, the rent and the expenses once — all in Canadian dollars — and the tool below places your cap rate against all thirteen benchmarks, reprices your net operating income at each city's rate, and says plainly whether you are in negative leverage at your mortgage rate.
Educational calculators — always consult a licensed professional before making financial decisions.
The all-in acquisition price, in Canadian dollars.
Total rent across all units, before any expenses.
Know your costs? Enter them. If not, the 50% rule estimates them.
Used to test for negative leverage — not to compute the cap rate.
Share of the year the unit sits empty. Ignored under the 50% rule.
Property tax + insurance + condo fees + maintenance + management. Exclude the mortgage. Used only in “Enter my expenses” mode.
Your cap rate
2.58%
All figures in Canadian dollars (CAD). NOI C$16,800 ÷ price C$650,000.
Against the Canadian city table
At 2.58%, this property out-yields 0 of 13 Canadian markets CBRE publishes, and would rank #14 if dropped into that table. It sits −1.93 points against the national high-rise Class A benchmark of 4.51%, and closest to Vancouver (3.50–4.00%).
Negative leverage at this mortgage rate
Cap rate 2.58% against a mortgage rate of 5.50% is a spread of −2.92 points. The property earns less unlevered than the debt costs, so borrowing reduces your return and it most likely runs cash-flow negative from day one. Across much of Canada that is simply the market condition rather than a bad deal — but it means you are buying appreciation and mortgage paydown, not income, and that should be a decision rather than a surprise.
A Canadian lender requires a minimum 20% down on a non-owner-occupied purchase — C$130,000 here — and CMHC insurance is not available on a pure rental buy. There is no low-down, mortgage-insured path into this: PMI and the 3.5%-down FHA route are US products and do not exist in this market. The federal stress test still applies on top.
What your NOI would be worth in each market
Same net operating income of C$16,800, repriced at each city's published benchmark. This is the comparison the number is for: it says what a buyer in that market would pay for this income stream, in Canadian dollars, against the C$650,000 you are actually paying.
| Market | Class A | Your spread | Value of your NOI (CAD) |
|---|---|---|---|
| SaskatoonSaskatchewan | 5.25–5.75% | −2.92 pts | C$305,455−C$344,545 vs your price |
| HalifaxNova Scotia | 4.50–5.25% | −2.30 pts | C$344,262−C$305,738 vs your price |
| OttawaOntario | 4.50–5.00% | −2.17 pts | C$353,684−C$296,316 vs your price |
| CalgaryAlberta | 4.50–5.00% | −2.17 pts | C$353,684−C$296,316 vs your price |
| EdmontonAlberta | 4.50–5.00% | −2.17 pts | C$353,684−C$296,316 vs your price |
| WinnipegManitoba | 4.50–5.00% | −2.17 pts | C$353,684−C$296,316 vs your price |
| VictoriaBritish Columbia | 4.50–5.00% | −2.17 pts | C$353,684−C$296,316 vs your price |
| Quebec CityQuebec | 4.25–5.00% | −2.05 pts | C$362,851−C$287,149 vs your price |
| Kitchener-WaterlooOntario | 4.50–4.75% | −2.05 pts | C$362,851−C$287,149 vs your price |
| LondonOntario | 4.00–4.75% | −1.80 pts | C$383,562−C$266,438 vs your price |
| MontrealQuebec | 4.25–4.50% | −1.80 pts | C$383,562−C$266,438 vs your price |
| TorontoOntario | 3.85–4.75% | −1.72 pts | C$390,698−C$259,302 vs your price |
| VancouverBritish Columbia | 3.50–4.00% | −1.17 pts | C$448,000−C$202,000 vs your price |
Benchmarks: CBRE Canada, Q1 2026 — CBRE multifamily, Class A, Q1 2026. CBRE publishes no high-rise Class A rate for Saskatoon, Winnipeg and Victoria, so those rows are the low-rise Class A range instead. These are institutional multi-family Class A figures. If you are pricing a single condo, a duplex or a small purpose-built rental, you are not buying that product, and your own cap rate can sit legitimately outside this table in either direction. Class B / value-add trades roughly 1.0–1.5 points higher in most Canadian markets — compare like with like. All amounts are Canadian dollars (CAD); benchmarks move quarterly.
Next: check what your financed position actually earns with the Canadian cash-on-cash return calculator, whether a lender will fund it with the DSCR calculator, or run a full pro-forma in the rental property ROI calculator. Estimate only — not investment advice. Confirm figures with a licensed Canadian professional.
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Multi-family cap rate by market
| Market | Class A | Class B / value-add |
|---|---|---|
| Vancouver | 3.50–4.00% | 3.50–4.00% |
| Toronto | 3.85–4.75% | 4.15–5.15% |
| London | 4.00–4.75% | 4.25–5.00% |
| Montreal | 4.25–4.50% | 4.25–4.50% |
| Quebec City | 4.25–5.00% | 4.75–5.75% |
| Kitchener-Waterloo | 4.50–4.75% | 4.50–5.00% |
| Ottawa | 4.50–5.00% | 4.95–5.80% |
| Calgary | 4.50–5.00% | 5.00–5.50% |
| Edmonton | 4.50–5.00% | 4.75–5.50% |
| Halifax | 4.50–5.25% | 4.75–5.50% |
| Winnipeg | 4.50–5.00% | 4.75–5.25% |
| Victoria | 4.50–5.00% | 4.25–4.75% |
| Saskatoon | 5.25–5.75% | 6.25–6.75% |
National average by segment (Q1 2026)
| High Rise Class A | 4.51% |
| High Rise Class B | 4.83% |
| Low Rise Class A | 4.69% |
| Low Rise Class B | 4.94% |
| New Construction | 4.66% |
Source: CBRE Canadian Cap Rates & Investment Insights, Q1 2026 (published April 2026) — the primary institutional survey. City figures are Class A; where CBRE marks a market "N/A" for high rise, we show the low-rise Class A range and label it. Figures move quarterly. Note that broker-published tables circulate with materially different numbers for some markets (Halifax being a clear example) — we cite the survey.
What a cap rate does not price in
A cap rate is net operating income divided by price, and both halves of that fraction leave things out. It excludes financing entirely — no mortgage interest, no principal, no CMHC MLI Select premium — which is what makes it useful for comparing an all-cash Winnipeg fourplex against a heavily-levered Toronto condo on the same basis. It also excludes capital expenditure: a roof, a boiler or a parking structure is a reserve line, not an operating expense, and CBRE's survey figures assume none of that is due. And it excludes acquisition costs entirely — land transfer tax, legal fees, a home inspection — because those happen once, at purchase, and never touch NOI again.
The other thing it leaves out is property class, even inside a single city row. CBRE's Class A figure prices institutional, professionally managed stock — generally newer construction or a recent full renovation, run at stabilized occupancy. Class B / value-add is older stock trading at a discount to reflect coming capital needs and a rougher path to that occupancy. The two are different products wearing the same city name, and the spread between them (1.0–1.5 points in most Canadian markets, per the table above) is the market's own price for that difference — it is not noise to average away.
Vacancy: the assumption baked into every cap rate on this page
CBRE prices Class A cap rates at or near stabilized occupancy — in practice a vacancy allowance well under 5%. CMHC's Rental Market Survey, fielded every October and reporting the primary purpose-built rental stock rather than a subset of institutional towers, shows how far individual cities actually sit from that assumption. National purpose-built vacancy rose to 3.1% in the October 2025 survey, up from 2.2% a year earlier — the loosest the market has been since before the pandemic.
| Market | Vacancy, Oct 2025 | Direction |
|---|---|---|
| Vancouver | 3.7% | 37-year high |
| Toronto | 3.0% | up from ~1.4% |
| Montreal | 2.9% | up from 1.8% |
| Quebec City | 2.4% | — |
| Ottawa | 2.9% | up from ~2% |
| Calgary | 4.9% | held despite +11% supply |
| Edmonton | 3.8% | — |
| Winnipeg | 2.8% | — |
| Halifax | 2.6% | up from 2.1% |
| Saskatoon | 3.1% | — |
| Victoria | 3.3% | — |
Source: Canada Mortgage and Housing Corporation, Rental Market Survey (purpose-built rental apartments, fielded October 2025), retrieved 2026-09-03 from CMHC's Housing Market Information Portal (HMIP table 2.1.31.2). London and Kitchener-Waterloo are surveyed by CMHC but no single confirmed 2025 figure was available at retrieval, so they are omitted here rather than estimated. CMHC vacancy and CBRE cap rate are two different surveys of two different (though overlapping) rental populations — read the gap between a city's vacancy rank and its cap rate rank as a signal, not a contradiction. Calgary carries both the highest cap rate on this page and the highest vacancy rate, despite an 11% surge in rental supply — that combination is the market pricing in the risk that the extra income runs past into 2026.
The number that decides your deal
Compare the cap rate to your mortgage rate. That is the whole game.
- Cap rate above your mortgage rate → positive leverage. Borrowing amplifies your return.
- Cap rate below your mortgage rate → negative leverage. Every borrowed dollar drags the return down, and the property likely bleeds monthly.
With gateway markets trading at 3.5–4.5%, negative leverage describes a very large share of the Canadian market. Investors accept it because they are buying appreciation and tenant-funded paydown rather than income — a real strategy, and the dominant one here. The failure mode isn't choosing it; it's choosing it without noticing.
Two rules that shape every Canadian deal
First, investment property requires 20% down and CMHC insurance is not available for non-owner-occupied purchases — so your capital commitment is heavy before the bet even starts, and the federal stress test still applies on top.
Second, the five-unit threshold changes everything. At 5+ units you can access CMHC MLI Select, a points-based program whose terms scale with the points a project earns for affordability, accessibility and climate compatibility. On an existing property CMHC publishes up to 85% loan-to-value and 40-year amortization at 50 points, and up to 95% loan-to-value and 50-year amortization at 100 points; the minimum debt coverage ratio is 1.10 for standard rental at every tier, rising to 1.20 for other shelter models and 1.40 where there is non-residential space. Same asset class, radically different financing — which is why the jump from a fourplex to a five-plex is one of the most consequential decisions in Canadian real estate.
Source: Canada Mortgage and Housing Corporation, MLI Select — CMHC's own published lending-parameter tables, checked 2026-09-01. The top tier is not the default tier: 95% LTV and a 50-year amortization require 100 points. CMHC sets these terms and can change them, so confirm the current table with an approved lender before underwriting to it.
Run your own property through the cap rate calculator, then check your financed position with cash-on-cash and whether a lender agrees using DSCR.