Changes to Mortgage Insurance Rules—Unlock Potential with Secondary Suites!

There is more exciting news for Canadian homeowners! On October 8, 2024, the federal government announced a significant update to mortgage insurance rules designed to help you maximize your property’s potential. Whether you've been thinking about adding a basement suite or transforming that garage into a laneway home, these changes make it easier than ever to create rental suites.

What’s New?

Starting January 15, 2025, homeowners can access insured refinancing to add secondary suites to their properties. Here’s what you need to know:

• Who’s Eligible?
• Homeowners who already own their property and occupy one of the existing units, or have a close relative living in one of the units.
• The new unit must be intended for long-term rental use—short-term rentals like Airbnb are not allowed.
• The additional units must be fully self-contained and meet municipal zoning requirements (e.g., a basement suite with a separate entrance or a laneway home).
• What Can Be Added?
• Legal, self-contained units such as basement suites or laneway homes, adhering to local zoning rules.
• Up to four dwelling units are permitted, including existing units.
• Financial Parameters:
• Maximum Loan-to-Value (LTV): Up to 90%, including the value of new units.
• Maximum Property Value: The total "as improved" value must be under $2 million.
• Maximum Amortization: 30 years.
• Additional financing should only cover the cost of the project.

Why Now?

Recent changes in municipal zoning, supported by the federal Housing Accelerator Fund, have made adding new rental units more feasible than ever. With these new mortgage insurance rules, homeowners can tap into the opportunity to create more housing while potentially generating extra income—ideal for seniors looking to age in place.

Get Ready for January 15, 2025!

If you’ve been considering adding a secondary suite to your property, now’s the time to start planning. With this new refinancing option, you can expand your home’s potential and help address Canada’s housing needs.

For more information or to discuss how this could benefit your situation, feel free to reach out to us!