Mortgage Insurance Rule Changes

Mortgage Insurance Rule Changes to Enable Homeowners to add Secondary Suites

October 8, 2024 the government is releasing details for lenders and insurers to offer this new insured mortgage refinancing product, effective January 15, 2025.


Parameters:

  • 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.

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