New Mortgage Insurance Rules to Support Secondary Suite Additions for Homeowners

The Canadian government has introduced significant changes to mortgage insurance regulations, effective January 15, 2025, to facilitate the addition of secondary suites by homeowners. These measures aim to increase housing density and provide homeowners with opportunities for additional income through long-term rentals.

Key Provisions of the New Regulations:

• Insured Mortgage Refinancing: Homeowners can refinance their mortgages to fund the construction of up to three self-contained units, such as basement apartments or laneway homes, in compliance with local zoning laws.
  
  

• Eligibility Criteria: The property's "as improved" value must be under $2 million, with a maximum loan-to-value ratio capped at 90%. The combined amount of the existing mortgage and the new financing cannot exceed the total project cost.
  
  

• Amortization Period: An extended amortization period of up to 30 years is available, facilitating more manageable monthly payments.
  
  

• Long-Term Rental Requirement: The additional units must be designated for long-term rentals and cannot be used for short-term accommodations like Airbnb, ensuring they contribute to the sustainable housing stock.
  
  

These regulatory changes align with municipal zoning reforms across Canada. They aim to alleviate housing shortages by promoting property densification and optimizing existing infrastructure. Homeowners are positioned as pivotal contributors to the national housing strategy, offering financial benefits for property enhancements that meet community needs.

For detailed information, refer to the official announcement by the Department of Finance Canada.

Government of Canada

At Assist 2 Sell, we recognize the potential these changes present for homeowners and investors. Our experienced team is ready to guide you through the process of leveraging these new opportunities, ensuring your property investments align with both regulatory requirements and your financial goals.

For personalized advice and comprehensive real estate services, contact Assist 2 Sell today. We're committed to helping you navigate these changes and maximize the potential of your property investments.

Sources

Government of Canada: https://www.canada.ca/en/department-finance/news/2024/10/mortgage-insurance-rule-changes-to-enable-homeowners-to-add-secondary-suites.html