Financing
Can I refinance my home to pay for a secondary suite?
Often yes. CMHC's refinance programme lets you borrow against up to 90 percent of the improved value, on properties under $2 million, with up to four units.
The short answer
Often yes, and the programme written for it is CMHC's refinance for secondary suites. The headline terms:
- Borrow against up to 90 percent of the property's value
- Property value must be under $2 million once improved
- Up to four units in total
- Amortisation up to 30 years
- Minimum credit score of 600 for at least one borrower
Improved value is the whole point
Most refinancing looks at what your home is worth today. This programme looks at what it will be worth once the work is done.
That matters because the suite you are borrowing to build is part of what secures the loan. It is the difference between borrowing against a house and borrowing against the house you are about to have, and for a conversion it is usually the difference between the numbers working and not working.
The occupancy condition
At least one of the units has to be lived in by you or by a relative, rent free. This is not a technicality. It is the condition that shapes who the programme is for.
It also happens to describe a multigenerational arrangement almost exactly. A family creating a home for a parent is the case this programme was written around.
Short term rentals are out
New suites created under the programme cannot be used as short term rentals. If the plan is to build a suite and put it on a nightly booking platform, this is not the route.
What this does not tell you
These are the programme's terms, not an assessment of your file. Whether you qualify depends on income, existing debt, the appraisal and the lender's own overlay on top of the CMHC rules.
We are not your lender. Take these terms to a mortgage professional and have them run your actual numbers before you plan around them.
Read how the financing options compare
Source: CMHC