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Insured Refinance: Adding a Secondary Suite



Starting today, January 15th, 2025, the Canada Mortgage and Housing Corporation (CMHC) has introduced a new program allowing insured mortgages to be refinanced to add a secondary suite. Previously, refinancing a mortgage fell under the category of an uninsured mortgage, meaning you would lose your CMHC insurance and be subject to higher rates. Additionally, refinancing was not allowed if your loan-to-value ratio exceeded 80%.


Under this new program, you can access up to 90% of your home’s equity. Moreover, the added value of the secondary suite can be considered in the refinance. The key requirement? The funds must be exclusively used to add a secondary suite to the property. Another important condition is that the secondary suite cannot be used as a short-term rental. This initiative comes at a crucial time during our country’s housing crisis, aiming to increase housing density and supply when it is most needed.


There are no restrictions on the type of secondary housing you can add, provided it complies with local bylaws and building codes. For instance, you could convert an unused basement into a self-contained suite or build a carriage house if your property’s zoning permits it. As long as the unit is self-contained, meets building code requirements, and isn’t used for short-term rentals, it qualifies under the program.


In addition to property-specific requirements, there are borrower and mortgage criteria that must be met. To qualify for the program, you must meet the following guidelines:


Borrower Requirements:

  • Be a Canadian citizen, permanent resident, or authorized to work in Canada.

  • Own the home, with at least one unit occupied by the borrower or a close family member.

  • Have at least one borrower with a minimum credit score of 600.


Mortgage and Property Requirements:

  • Maximum loan-to-value ratio: 90%.

  • Maximum property value: $2,000,000.

  • Maximum amortization period: 30 years.

  • The property must have year-round occupancy and access.

  • A list of improvements, cost estimates, building plans, and a building permit must be provided.


As with all CMHC programs, lender availability and criteria will apply. Furthermore, you must demonstrate sufficient income to qualify for the additional funds required for the project. If the secondary unit is intended for rental, the potential rental income can be factored into your qualification.


If you’re considering whether this option suits you and your property, it’s always worth having a conversation. I’d be happy to help you crunch the numbers and explore your options. Click here to book a call, and let’s discuss how this program might work for you.

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