claimed as business expenses. However, it's important to note that if you refinance your primary residence and continue to live there, the mortgage payment for your current house will not be tax deductible.
Here is what CRA website explains on how to do it: Line 8710 – Interest and bank charges
You can deduct the interest charge on money you borrow to buy or improve your rental property. If you have interest expenses that relate to the construction or renovation period, go to Construction soft costs. You can also deduct interest charges you paid to tenants on rental deposits. If you are claiming interest as a rental expense on Form T776, do not include it as a carrying charge on Form 5000-D1, Federal Worksheet. Do not deduct in full for the year any lump-sum amounts paid for interest or a fee paid to reduce the interest rate on a mortgage. You prorate these amounts for the rest of the original term of the mortgage or loan. You also prorate a penalty or bonus paid to a financial institution to pay off your mortgage loan before it is due. For example, if the term of your loan or mortgage is five years, and in the third year you pay a fee to reduce your interest rate, treat this fee as a prepaid expense and deduct it over the remaining term of the loan or mortgage. Loan fees You can deduct certain fees when you get a mortgage or loan to buy or improve your rental property. If the loans relate to the construction or renovation period, first read about soft costs. Loan fees include: • mortgage applications, appraisals, processing, and insurance fees • mortgage guarantee fees • mortgage brokerage and finder's fees
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