You’ve done your research and found the perfect mobile or manufactured home. Now comes the hard part: finding the money to pay for it. Depending on your credit and the model you’ve selected, you may be able to move right in with a traditional mortgage. If not, there are other ways to get options for mobile home financing in Canada.
What types of mobile home financing are available in Canada?
Manufactured or prefabricated homes are considered either personal or real property — the distinction determines what type of loan you’re eligible for:
Personal property. If your home is designed for the road or sits on rented land, it may be considered personal property, which means you’ll need a personal loan or similar financing options to pay for it.
Real property. If your home is designed for a solid foundation or sits on land you own, it’s likely considered real property, making it eligible for a mortgage.
1. Traditional mortgage
Though not easy to get a traditional mortgage for a mobile home, it might be an option if your home is on a foundation and you own or plan to buy the land it’s placed on. Generally, traditional mortgages offer stronger rates than other types of loans, and you might qualify for a Federal Housing Administration (FHA) loan to finance a mobile home and the property it sits on.
Compare traditional mortgages for a mobile home
It may be difficult to qualify for a traditional mortgage in order to purchase a mobile home, however you may be able to apply if you are purchasing the land that your mobile home will sit on. Compare mortgages from these providers below:
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2. Chattel mortgage
If your home is movable property and you plan to lease the land you move it to, it isn’t typically eligible for a traditional mortgage.
Instead, look into a chattel mortgage. Also called a personal property lien, this type of mortgage secures the loan with the personal property you intend to move into. The loan remains active even if you move your mobile home to another location, though you’ll often pay a higher interest rate than with a traditional mortgage.
3. Unsecured personal loans
Depending on your credit and financing needs, an unsecured personal loan could be a better option than a chattel mortgage. You aren’t required to put up your home as collateral. But many lenders limit borrowing to $50,000, which may not be enough to fully finance your manufactured home. If you have savings or are looking for a simple place to live on rented property, an unsecured loan could be useful in getting you settled.
Compare unsecured personal loans for a mobile home
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4. Seller financing
Large sellers of manufactured homes offer in-house financing. You may not get the strongest rates, but it makes for a simplified buying process all under one roof. With some sellers, you can prequalify for a loan and then select the floor plan and fixtures based on your budget.
What interest rate can I expect with mobile home financing in Canada?
The interest rate you’ll pay depends on the home you intend to purchase, the type of loan you’re looking at, the loan term and the amount you’re interested in borrowing. Your credit, income and existing debt will also play a role in the rate a lender is willing to offer.
If you have reliable employment income, good credit and your mobile home qualifies for a traditional mortgage, you could see approval at rates hovering around 2% as of the time of writing. On the other hand, those with less-than-perfect credit who are looking for a chattel mortgage or personal loan can find interest rates that border on the upper-end of legal — up to 39%.
Many lenders offer preapproval that can help you gauge potential approval amounts and interest rates before committing to a loan.
How much does it cost to buy a manufactured home?
Prices for a single-wide mobile home in 2020 can range anywhere from $50,000 to $200,000. Depending on the overall square-footage, any upgrade and how much you customized the design as opposed to getting a standard model. Remember, when you’re ready to buy a manufactured home, account for more than just the purchase price. Every type of home comes with unique costs, which a budget can help you tackle.
What are the different types of manufactured homes?
While almost every manufactured or modular home is called a mobile home, there are differences between them that can impact the type of financing you qualify for.
Single or mini homes. These home are constructed as one unit, and then transported to the site where they will be more permanently situated. Because they have to be transported away from where these home were built, their dimensions must not exceed the limits set by the province or territory highway regulations.
Modular homes. Modular homes are constructed in multiple units and then transported to the site where the pieces are attached together and the whole unit is affixed to a concrete foundation. This means they don’t tend to lose value like a manufactured home. Lenders are generally much more willing to finance a modular home, and you might even qualify for a traditional mortgage.
How much does moving a mobile home cost?
Unless your home is built on-site, you’ll need to transport it to the land you plan to live on. Consider the full costs of moving that include:
A moving company. Most mobile homes don’t allow for DIY moving. Get estimates from two to three moving companies to compare prices. Costs can range from $5,000 to $8,000 for short moves of smaller homes. Larger homes moving over longer distances, can cost closer to $20,000.
Weight and size. Moving a lightweight single-wide trailer is usually less expensive than hauling a heavy triple-wide. Your moving company should estimate the weight and size of your trailer for a more accurate moving price.
Permits. Most cities and counties across Canada require a permit to move and set up your manufactured home. Call your local authorities to learn how much you’ll need to budget.
Setup. Your moving company likely folds this cost into your estimate, but it’s best to double-check. Correctly placing your home on the right foundation is critical to meeting safety standards and keeping your home maintained for years to come.
Foundation. If you’ve purchased a preowned home and intend to move it, your price may vary by the type of foundation it currently sits on. Homes on block foundations are generally more expensive to move.
Do I need to own the land under my mobile home?
No. You don’t need to buy the land you intend to place your mobile home on. But if you chose not to buy land you’ll likely need to lease it — either from a private party or from a mobile home park.
Like renting, you’ll agree to a set lease period with a contract that includes what is — and isn’t — included in your lease. Some owners offer amenities like garbage pickup, gardening services and maintenance. Compare potential rental costs to the cost and benefits of owning the land to determine the best place to place for your mobile home.
What else should I consider when purchasing a mobile home?
When comparing your options, determine the needs of you and your family foremost. Factors that can play a role in the type of mobile home you finance include:
Age. The age of your manufactured home likely affects its selling price. Older homes may be cheaper, but they’re also considered more difficult to move and maintain.
Previous ownership. Consider the previous owners and the condition of their home. Ask about repairs, maintenance records or recent updates made to the property.
Zoning laws. Every county and city restricts where you can put your mobile home, so check the zoning laws in your area.
Size. Single-wide trailers generally come with two bedrooms, while double- and triple-wides can be as large as a standard home. Think of the space you and your family need.
Utilities. Utilities costs money. Contact the city or county you’re moving to so you can have a general idea of hookup and starting fees.
Bottom line
Many Canadians call a mobile home…well, home. Offering a wide variety of styles, sizes and models, a manufactured home can offer the space and amenities that suits your requirements. And because manufactured residences are typically less expensive than more traditional properties, you might be able look beyond traditional mortgages to other loan options that could unlock the door of your next home.
Frequently asked questions
It is possible, but it isn't as simple as getting a mortgage for a traditional home. It might be an option if your home is on a foundation and you own or plan to buy the land it's placed on. The table at the top of this page lists lenders who may finance your mobile home purchase.
Yes. If you're getting an unsecured personal loan, whether the home is used or new won't play much of a factor in your eligibility. With secured loans like mortgages, the condition of the home may factor into how much you're approved for.
Technically, no. Think of manufactured homes as the umbrella term for both mobile and modular homes. Mobile homes are single units that remain on a steel chassis even when the wheels are removed and the exterior is finished. Modular homes are often built in pieces and sent to the build site. Once in place, they resemble traditional homes and generally cannot be moved. However, people often use the words "mobile" and "modular" interchangeably.
Yes. If you're unable to secure financing for your mobile home, you may find trailers for rent in mobile home parks.
Kellye Guinan is a freelance editor and writer, specializing in consumer lending. Her writing and analysis has been featured on Bankrate, MSN and MediaFeed. She holds degrees in anthropology and German language and literature from Middle Tennessee State University.
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