– New Mortgage insurance changes will Enable Homeowners to Add Secondary Suites
Starting January 15, 2025, Canadian homeowners will have new government support to create secondary suites. Thanks to a policy that allows homeowners to access up to 90% of their home’s value through insured mortgage refinancing. This initiative, announced by Deputy Prime Minister Chrystia Freeland, aims to make it easier for Canadians to add housing units like basement flats, garden suites, or laneway homes. The government hopes this “gentle density” approach will help meet Canada’s growing housing needs.
The Canada Mortgage and Housing Corporation (CMHC) is also launching a Canada Secondary Suite Loan Program. Offering low-interest loans of up to $40,000 for homeowners wanting to build secondary suites. This effort is intended not only to boost the housing supply but also to create opportunities for homeowners to supplement their income with rental suites. Eligible secondary suites must be fully self-contained and meet local zoning rules.
Secondary suite incentive program
Here in BC, BCHousing is currently accepting applications for the Secondary Suite Incentive Program (SSIP) helping homeowners create affordable housing. Eligible homeowners may be granted up to 50% of their renovation costs, capped at $40,000, through a forgivable loan—meaning the loan doesn’t need to be repaid as long as the program’s conditions are met.
Homeowners considering refinancing to add a secondary suite should know some key requirements. First, the home must have a maximum property value of $2 million (post-upgrade). Second, the refinanced mortgage will have a 30-year amortization cap. Secondary units can’t be used as short-term rentals, like Airbnb, to ensure these additional spaces support long-term housing. If you’re unsure of what this entails, reach out to Greg Horvath, Mortgage Broker to help clairy the rules.
The new measures build on recent changes, aimed at helping first-time homebuyers, such as expanding the price cap for insured mortgages from $1 million to $1.5 million. Also allowing 30-year amortizations for all first-time buyers. These initiatives, will hopefully unlock more housing options across Canada. Providing affordable solutions for both renters and homeowners looking to make a secondary suite investment.
BC Housing Secondary Suites Fact Sheet
