Rule Change to Enable Canadian Homeowners to Build Secondary Suites with Mortgage Refinancing
Zach Silverman | January 3, 2025
Housing affordability remains a major challenge across Canada, but a new opportunity is emerging for homeowners. Starting January 15, 2025, updated mortgage insurance rules will allow Canadians to access insured refinancing to build secondary suites—such as basement apartments or laneway homes.
This initiative, introduced in Budget 2024 and detailed by the Department of Finance Canada, aims to increase housing supply, generate rental income for homeowners, and enhance property value.
Why This Matters for Homeowners
Traditionally, converting unused space into rental units has been expensive and complicated by municipal zoning laws. However, recent zoning reforms in Canada’s largest cities are making it easier to create legal secondary suites.
For homeowners, this means:
✔️ Additional income to help with mortgage payments
✔️ Increased property value with legal rental units
✔️ Support for aging in place by creating affordable housing for family members
Key Details of the New Mortgage Rules
Who’s Eligible?
- Homeowners who already own the property
- The homeowner or a close relative must live in one of the existing units
- Additional units cannot be used as short-term rentals
What Types of Units Qualify?
- Fully self-contained suites with separate entrances
- Basement apartments, laneway homes, or garden suites
- Up to four total dwelling units (including existing ones)
Financial Guidelines
- Property value must be under $2 million (after improvements)
- Refinancing up to 90% of the home’s value, including added value from new units
- Maximum 30-year amortization
- Loan amount cannot exceed the project’s total costs
When Do These Changes Take Effect?
Starting January 15, 2025, lenders can submit applications for mortgage insurance under these new guidelines. Eligible properties across Canada must meet local zoning regulations for secondary suites.
How Silverman Mortgage Can Help
This program is a game-changer for homeowners looking to unlock their home’s full potential. Whether you want to increase rental income, help a family member with housing, or boost your property’s value, Silverman Mortgage is here to guide you.
✅ Expert Advice: We’ll walk you through your refinancing options
✅ Tailored Solutions: Get a mortgage plan designed for your financial goals
✅ Seamless Process: We handle the details, so you can focus on your investment
Ready to explore your options? Contact Silverman Mortgage today and take the first step toward turning your unused space into a valuable asset!
📞 Call us now or book a consultation online to get started.
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In recent years, housing affordability has become a significant concern for many Canadians, particularly for first-time homebuyers facing soaring prices and strict mortgage qualification criteria. To address these challenges, the Canadian government has introduced several housing affordability measures. In this blog post, we'll examine these measures and their potential implications for homebuyers. Increased Home Buyer's Plan (HBP) Withdrawal Limit Effective April 16, the Home Buyer's Plan (HBP) withdrawal limit will be raised from $35,000 to $60,000. The HBP allows first-time homebuyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) to use towards a down payment on a home. By increasing the withdrawal limit, the government aims to provide young Canadians with more flexibility in saving for their down payments, recognizing the growing challenges of entering the housing market. Extended Repayment Period for HBP Withdrawals In addition to increasing the withdrawal limit, the government has extended the repayment period for HBP withdrawals. Individuals who made withdrawals between January 1, 2022, and December 31, 2025, will now have five years instead of two to begin repayment. This extension provides borrowers with more time to manage their finances and repay the withdrawn amounts, alleviating some of the immediate financial pressures associated with using RRSP funds for a down payment. 30-Year Mortgage Amortizations for Newly Built Homes Starting August 1, 2024, first-time homebuyers purchasing newly built homes will be eligible for 30-year mortgage amortizations. This change extends the maximum mortgage repayment period from 25 years to 30 years, resulting in lower monthly mortgage payments. By offering longer amortization periods, the government aims to increase affordability and assist homebuyers in managing their housing expenses more effectively. Changes to the Canadian Mortgage Charter The government has also introduced changes to the Canadian Mortgage Charter to provide relief to homeowners facing financial challenges. These changes include early mortgage renewal notifications and permanent amortization relief for eligible homeowners. By implementing these measures, the government seeks to support homeowners in maintaining affordable mortgage payments and mitigating the risk of default during times of financial hardship. The recent housing affordability measures announced by the Canadian government are aimed at addressing the challenges faced by homebuyers in today's market. These measures include increasing withdrawal limits, extending repayment periods, and offering longer mortgage amortizations. The goal is to make homeownership more accessible and affordable for Canadians across the country. As these measures come into effect, it's crucial for homebuyers to stay informed about the changes and their implications. Consulting with a mortgage professional can help individuals explore their options and make informed decisions about their housing finances. If you're interested in learning more about these changes and how they may affect you, please don't hesitate to connect with us. We're here to walk you through the process and help you consider all your options and find the one that makes the most sense for you.