First-time buyers in Hamilton are house hacking because it fixes the two problems that keep people renting: the down payment and the monthly payment. You buy a duplex, a triplex or a house with a legal basement unit, live in one unit and rent out the rest. A tenant's rent then covers a big part of your mortgage, and the minimum down payment is the same 5% you would put down on a regular house.
That is the whole idea. The rest is detail.
What house hacking looks like in real life
Picture an older Hamilton house with a side door. Upstairs is a two-bedroom unit. Downstairs is a one-bedroom with its own kitchen and its own entrance. You live in one. Someone else lives in the other and pays you rent every month.
You own the whole house. You pay one mortgage. But you are not carrying it alone.
A typical two-bedroom unit in Hamilton rents for about $1,900 a month. A one-bedroom basement unit rents for about $1,500. That rent goes toward your home instead of someone else's.
Why it became the way in for younger buyers
For a lot of Gen Z and millennial renters, the math on a regular house does not work on one or two incomes. House hacking changes the math in three places at once.
The down payment stays the same. On a one- or two-unit home you live in, the minimum down payment follows the same rule as any house. 5% on the first $500,000, then 10% on the part above that. You are not paying investor rules for an investor-style home.
The rent can help you qualify. CMHC's rules let a lender count up to 100% of the gross rent from the second unit of an owner-occupied two-unit home. Lenders and the other insurers set their own rules, and many count less. Even so, a lender can look at you differently when a tenant helps carry the payment. Ask your lender how much of the rent they will count.
The monthly cost drops. Your mortgage, taxes and insurance are the same. But the rent coming in means less comes out of your own pocket each month. For some buyers, owning ends up close to what they paid in rent. For others, it is still more. It depends on the home and the price, and that is exactly what to check before you buy.
Two units is not the limit. Three- and four-unit homes are common in Hamilton, and you can house hack those too. The rules change a little: you need at least 10% down instead of 5%, and lenders can count up to half of the gross rent from the other units (or the rent after expenses). In return, two or three tenants are helping with one mortgage instead of one.
The part nobody tells you: you are never stuck
This is the biggest reason house hacking wins for younger buyers. A first condo or a small single house can feel like a trap if your life changes. New job in another city. A partner. A baby. You might have to sell at a bad time.
A two-unit home gives you an option. If you move out, you can usually rent out your unit too. Now both units pay the mortgage. You keep the home, and the tenants keep paying it down.
Two things to know first. Your mortgage was set up for a home you live in, so tell your lender before you move out. And rental income is taxed, so talk to an accountant. Do those two things and moving out becomes a choice, not an emergency.
Why Hamilton works for this
Hamilton has a lot of older houses with full basements, side doors and separate entrances. Many were built as or turned into two units years ago. You will find them across the Mountain, in East Hamilton neighbourhoods like Crown Point, and on the older streets below the escarpment.
Ontario also made it easier. Since late 2022, the province's rules say most homes on serviced lots in towns and cities can have up to three units without a rezoning. That can be up to three units in the house, or two in the house and one in a garage or garden suite. Check the City's zoning for the exact lot you want.
And if you buy a single house and add a unit later, CMHC has a refinance program for it. You can borrow up to 90% of the home's value after the work is done (homes valued under $2 million), stretched over up to 30 years. The money can only go to building the suite, and CMHC wants to approve it before construction starts.
Want to see what two-unit homes sell for, and what each unit rents for, area by area? Our free Hamilton house hack guide walks you through it.
"Legal" is the word that matters
Plenty of houses have a basement apartment. Not all of them are legal. A legal unit has a building permit and passed inspection for fire safety and the building code.
Why it matters to you:
- A lender may not count rent from a unit that is not legal.
- Your home insurance may not cover it.
- Fixing an illegal unit after you buy can cost real money.
Before you fall in love with a house, ask: is the second unit legal, and is there paperwork to prove it? Get the permit history before you make an offer, not after.
The honest trade-offs
House hacking is not for everyone. You share walls with your tenant. You hear them sometimes, and they hear you. You are the landlord now, so you fix the leaking tap, collect the rent and follow Ontario's tenant rules. Some months a unit sits empty between tenants, and you carry the whole payment.
If you would rather not deal with the tenant side, a property manager can handle it for a fee. Build that cost into your numbers from day one.
None of this is a reason not to do it. It is a reason to go in with eyes open, a cushion in the bank, and a plan for the first empty month.
How to start
Start with your down payment. Most first-time buyers stack it from an FHSA, the RRSP Home Buyers' Plan, savings and sometimes family help. Then get pre-approved with a lender who knows two-unit homes and will tell you how they treat the rent.
Picture someone in their late twenties renting a one-bedroom in Crown Point, handing over most of a paycheque every month. They buy an older house with a legal basement unit instead. Upstairs is theirs. The rent from downstairs covers a big share of the mortgage, so owning costs them about what renting did. Two years later a new job pulls them to Burlington. They rent out the upstairs too, keep the house, and two tenants now pay it down. Nobody had to sell. That is the part of house hacking that never makes the headlines.
If you are looking in Hamilton, here is the full picture: the Hamilton House Hack Starter Kit. If you are looking somewhere else, the general starter kit is here: the House Hack Starter Kit. And if you are just starting out as a first-time buyer, begin here: the First Home Money Map.
Before you buy, talk to a mortgage professional about your numbers and a real estate lawyer about the home and any lease that comes with it.
Common questions
What is house hacking?
You buy a home with two to four units, such as a duplex, a triplex or a house with a legal basement unit. You live in one unit and rent out the others, so the rent pays a big part of the mortgage.
Do I need a bigger down payment to buy a duplex I will live in?
No. On a one- or two-unit home you live in, the minimum down payment is the same as a regular house: 5% of the first $500,000 and 10% of the part above that, up to $1.5 million.
Does the rent from the second unit help me qualify for a mortgage?
It can. CMHC allows up to 100% of the gross rent from the second unit of an owner-occupied two-unit home to count. Lenders and other insurers set their own rules and often count less, so ask your lender.
What happens if I move out later?
You can usually rent out your unit too and keep the home as a two-unit rental. Talk to your lender and an accountant before you move, because the mortgage terms and taxes can change.