I'm currently in the process of closing a rental property and the mortgage offer with the lowest interest rate is a collateral mortgage.
As I'm learning the pros and cons of a collateral mortgage, one question I had was... Could having a large collateral charge (I heard 125% of the property value) affect my future borrowing capacity? We are planning to buy a bigger place for our principal residence in a year, so we would be applying for a larger mortgage than we have now... Would a collateral charge on my rental property affect how much mortgage I could get for my principal residence?
Thanks. (I'm in Canada, btw)