Secondary Suite Financing

Tracy Head • October 18, 2024

Mortgage rule changes seem to be coming at us fast and furious. This isn’t surprising given we are in an election year.

Several weeks ago I wrote about the change to the ceiling for the purchase price of insured homes and the extended amortization that will be available.


On October 8, 2024 the government announced a new program that will come into effect January 15, 2025.

The new program will enable clients who already own their homes to refinance up to 90 per cent of the value of the home to use the available equity to create a secondary suite.


Current rules only allow refinances up to 80 per cent of the value of the home, regardless of the purpose of the refinance.


The parameters of this new program, taken directly from the CMHC website (Mortgage Insurance Rule Changes to Enable Homeowners to Add Secondary Suites  - Canada.ca) are as follows:

  • This measure will apply to all borrowers seeking to access mortgage insurance in Canada to add more units (secondary suites). These borrowers must satisfy the following requirements:
  • Already own their properties;
  • The borrower or a close relative are occupying one of the current units;
  • Intend to construct additional units; and,
  • The additional unit(s) must not be used as a short-term rental.
  • Refinancing: Insured refinancing will be allowed for the purpose of building additional unit(s).
  • Legal units: The new units must be fully self-contained units (e.g., basement suites with separate entrances, laneway homes) and meet municipal zoning requirements.
  • Number of units: Maximum of four dwelling units including the existing unit.
  • Maximum Property Value Limit: The “as improved” value of the eligible residential property against which the loan is secured must be less than $2 million.
  • Maximum Loan-to-Value limit: Up to 90 per cent of the property value, including the value added by the secondary suite(s), in combination with any other outstanding loans secured by the property.
  • Maximum amortization: 30 years.
  • Additional financing must not exceed the project costs.


We are still waiting on clarification from lenders as to their specific guidelines around this program so I will provide more information as it becomes available. 


With respect to what this means in dollars and cents, using a home valued at $800,000 we will now be able to refinance up to $720,000 for the purpose of adding an additional legal suite. Under previous guidelines we would only be able to refinance up to $640,000 so in this example clients will be able to access $80,000 more of the equity in their home.


It will be interesting to see what the uptake is for this program. 


One particular group of clients I see this benefitting is clients who have only been in their home a few years that have seen a moderate growth in their equity after only having put down the minimum down payment when they purchased their home.


With carrying a higher mortgage and the increased cost of living overall these clients may really benefit from access to funds to add a secondary suite to their home.

Tracy Head

Mortgage Broker

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Early Renewal

By Tracy Head • August 27, 2025
Does an early renewal make sense? 2020 was a very busy year for home buying and mortgages. This means that 2025 is and has been a busy year for mortgage renewals as the majority of clients seemed to choose five year terms in 2020. I’ve had lots of conversations with my own and new clients about whether it makes sense to renew early. Each conversation is slightly different based on client needs and their individual circumstances. Most of the time I suggest that clients stay with their current lenders until their renewal dates because their current interest rates are anywhere between 1.6 per cent and 2.79 per cent. If you don’t need to make any immediate changes it makes the most financial sense to stay put until your term runs out. We can start the process of either switching or refinancing mortgages four months ahead of your renewal date and lock in a rate for you. As a generalization, when people ask about doing a straight switch (not adding any money to their mortgage) I will do a survey of what interest rates are available so they can go back to their lender to try to negotiate a great rate. Time and time again I’ve worked with clients on switches for them to cancel at the last minute as their current lender finally sharpens the pencil rather than lose the client. This is why I always try to help people negotiate with their current lender rather than put everyone through the work of having a new mortgage approved. If clients are wanting to add money to their mortgage to pay out consumer debt or pay for home renovations that changes things a bit. Some lenders are more aggressive with their refinance rates so it makes sense to make a move. Another situation has popped up this week that has had me crunching numbers for multiple clients. One of my favorite lenders came out with a quick-close rate special that is pretty hard to pass up. The fine print is that the new mortgage has to finalize within thirty days. I have been working on a refinance at renewal for clients that is set to close at the beginning of November. I took a look at how their current lender calculates the payout penalty when they are this close to renewal. It turns out they charge daily interest instead of a three-month interest penalty or interest rate differential. So I did the math. If we pay out early to take advantage of this great interest rate their payout penalty is around the $1000 mark. Over the term of the new mortgage they will save approximately $5500 in interest cost and their monthly payment will be about $85 per month less. Even after they pay out the penalty to move a bit early they will still be $4500 ahead over the term of their mortgage. This is one of the few times I’ve recommended that it makes sense to move forward ahead of the renewal date.  If you have a renewal coming up over the next few months I’d say it’s a good idea to connect with your mortgage person to look at what rates are available now and figure out whether it makes sense to consider making a move sooner rather than later. Lenders will pop up with rate specials from time to time so it is worth having your mortgage professional keep an eye open for you as your renewal date comes closer. It may just save you a significant amount of money.

Purchase Checklist

By Tracy Head • August 11, 2025
Last week was a vivid reminder of the importance of finalizing your home insurance as soon as you are within thirty days of your closing date on a home purchase. I had three clients with purchases closing on the Friday after the fire broke out in Peachland. All three had to push their closing dates back because they couldn’t get their insurance in place due to an active fire. Thinking about this led me to consider a few of the key steps involved when purchasing a home. I’ve written about this in prior columns but I feel a reminder is never a bad idea. There are a few areas of crossover between the guidance your realtor gives you and the advice you receive from your mortgage person. When your realtor writes your purchase contract there are some standard conditions that are added to the agreement. You will generally see the following: Subject to the purchaser obtaining satisfactory mortgage financing Subject to the purchaser having a home inspection conducted Subject to the purchaser arranging home insurance Subject to review of strata documents if applicable Subject to the sale of the purchasers’ current home if applicable The financing end is obviously our responsibility. I do double-check with my clients that they have taken care of the other conditions. Most realtors are great at offering support to their clients with respect to addressing the relevant conditions. In some cases I feel like realtors tell clients the steps they need to take but my guess is that the whole process can feel or become overwhelming. Before I give my clients the ok to remove their financing subject I confirm that they have taken care of the home insurance as this is one piece they sometimes miss.  If you are going through the process of purchasing a home my suggestion is keep a notebook (aging myself by suggesting a paper version) or a list on your phone to keep track of your must-do tasks as you go through the process. I have a checklist that I’m happy to share if you would like a copy.