Mortgage Insurance Rule Changes Enable Homeowners to Add Secondary Suites

Luisa & Candice Mortgages • January 3, 2025

As housing affordability challenges persist across Canada, innovative solutions are reshaping the way homeowners can contribute to housing supply. Starting January 15, 2025, new mortgage insurance rule changes will allow Canadian homeowners to access insured refinancing options to create secondary suites, such as basement apartments or laneway homes.


This move, announced in Budget 2024 and detailed by the Department of Finance Canada, is part of a broader strategy to increase housing density and improve affordability while offering homeowners the chance to generate additional income.


Why These Changes Matter

Historically, converting extra space into rental units has been both costly and mired in municipal red tape. Recent zoning reforms across Canada’s major cities, driven by Housing Accelerator Fund agreements, are reducing these barriers. The creation of secondary suites not only expands housing supply but also provides financial benefits to homeowners, such as offering seniors additional income to support aging in place.


Key Parameters for the New Rules

The new mortgage insurance program is designed to enable homeowners to build legal, self-contained secondary suites that comply with municipal requirements.


Here are the essential details:

Eligibility Requirements

Homeowners must already own the property.

The homeowner or a close relative must occupy one of the existing units.

Additional units must not be used as short-term rentals.


Project Specifications

New units must be fully self-contained with separate entrances (e.g., basement suites, laneway homes).

Up to four total dwelling units are allowed, including existing units.


Financial Parameters

The “as improved” property value must be less than $2 million.

Homeowners can refinance up to 90% of the property’s value, including the enhanced value from secondary suites.

The maximum amortization period is 30 years.

Additional financing must not exceed the project’s costs.


When Do These Rules Take Effect?

Starting January 15, 2025, lenders can submit applications for mortgage insurance under these updated parameters. This applies to all eligible properties across Canada, provided the new units align with municipal zoning requirements.


What This Means for Homeowners

For homeowners with underutilized space, such as basements or detached garages, this new program offers an opportunity to increase property value and create a source of long-term income. By building legal secondary suites, homeowners can contribute to Canada’s rental housing market while gaining financial security.


A Step Toward Housing Solutions

As housing supply remains a pressing issue, these mortgage insurance changes reflect a commitment to practical, homeowner-driven solutions. Whether you’re a senior looking to age in place or a family seeking to maximize your property’s potential, these changes represent an exciting opportunity to invest in your home and your community.

Stay informed and explore your options with your lender to determine if this program is right for you. The path to unlocking your property’s potential begins in 2025.


Recent Posts

Worried About Your Mortgage Renewal? You’re Not Alone

By Luisa & Candice Mortgages • June 18, 2025
Worried About Your Mortgage Renewal? You’re Not Alone If your mortgage renewal is coming up soon, you're likely feeling a bit of financial pressure—and you’re not the only one. A recent survey shows that over half of Canadian homeowners believe their upcoming mortgage renewal could impact their current living situation. With interest rates still higher than what many borrowers locked in before 2022, 45% of those renewing in the next 12 months expect their monthly payments to increase. Even though the Bank of Canada has held its key overnight rate steady at 2.75%, borrowing costs remain elevated compared to the low-rate years we saw earlier in the decade. And that’s changing how Canadians think about their finances. Changing Plans and Tightening Budgets Among those worried about their renewal, 73% say they’re already cutting back on discretionary spending—things like eating out, entertainment, or travel—to brace for higher mortgage payments. For many, it goes deeper than just trimming the budget. Nearly one in four surveyed homeowners said they’re rethinking their entire financial strategy. Some are pressing pause on home renovations (43%), while others are considering downsizing or relocating to a more affordable area (29%). A smaller group (15%) is even open to major lifestyle changes, like moving in with roommates or relocating to a new neighbourhood altogether. Fixed-Rate Mortgages on the Rise In this climate, most homeowners looking to renew are leaning toward fixed-rate mortgages, with 75% preferring the stability of predictable payments. For those facing uncertainty, locking in a rate for the next few years can offer peace of mind—even if it means paying a little more in the short term. First-Time Buyers Are Feeling It Too It’s not just current homeowners feeling the pinch. A separate survey found that more than half of Canadians planning to buy a home are cutting back on non-essential spending to save for their down payment or other buying costs. About 31% are even considering tapping into savings or investment accounts like TFSAs, RRSPs, or first-time home savings accounts to make their purchase possible. What This Means for You Whether you’re preparing to renew or purchase for the first time, this environment calls for smart, strategic planning. You’re not alone in feeling uncertain—but with the right guidance, you can navigate these changes confidently. Have questions about your upcoming renewal or wondering what type of mortgage is right for today’s market? Let’s connect. We're here to help you make informed, confident decisions about your home financing.

Deposit Lending And Bridge Financing

By Luisa & Candice Mortgages • June 18, 2025
Let’s say you have a home that you’ve outgrown; it’s time to make a move to something better suited to your needs and lifestyle. You have no desire to keep two properties, so selling your existing home and moving into something new (to you) is the best idea. Ideally, when planning out how that looks, most people want to take possession of the new house before moving out of the old one. Not only does this make moving your stuff more manageable, but it also allows you to make the new home a little more “you” by painting or completing some minor renovations before moving in. But what if you need the money from the sale of your existing home to come up with the downpayment for your next home? This situation is where bridge financing comes in. Bridge financing allows you to bridge the financial gap between the firm sale of your current home and the purchase of your new home. Bridge financing allows you to access some of the equity in your existing property and use it for the downpayment on the property you are buying. So now let’s also say that it’s a very competitive housing market where you’re looking to buy. Chances are you’ll want to make the best offer you can and include a significant deposit. If you don’t have immediate access to the cash in your bank account, but you do have equity in your home, a deposit loan allows you to make a very strong offer when negotiating the terms of purchasing your new home. Now, to secure bridge financing and/or a deposit loan, you must have a firm sale on your existing home. If you don’t have a firm sale on your home, you won’t get the bridge financing or deposit loan because there is no concrete way for a lender to calculate how much equity you have available. A firm sale is the key to securing bridge financing and a deposit loan. So if you’d like to know more about bridge financing, deposit loans, or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you.

Parental Leave

By Luisa & Candice Mortgages • June 11, 2025
Chances are if the title of this article piqued your interest enough to get you here, your family is probably growing. Congratulations! If you’ve thought now is the time to find a new property to accommodate your growing family, but you’re unsure how your parental leave will impact your ability to get a mortgage, you’ve come to the right place! Here’s how it works. When you work with an independent mortgage professional, it won’t be a problem to qualify your income on a mortgage application while on parental leave, as long as you have documentation proving that you have guaranteed employment when you return to work. A word of caution, if you walk into your local bank to look for a mortgage and you disclose that you’re currently collecting parental leave, there’s a chance they’ll only allow you to use that income to qualify. This reduction in income isn’t ideal because at 55% of your previous income up to $595/week, you won’t be eligible to borrow as much, limiting your options. The advantage of working with an independent mortgage professional is choice. You have a choice between lenders and mortgage products, including lenders who use 100% of your return-to-work income. To qualify, you’ll need an employment letter from your current employer that states the following: Your employer’s name preferably on the company letterhead Your position Your initial start date to ensure you’ve passed any probationary period Your scheduled return to work date Your guaranteed salary For a lender to feel confident about your ability to cover your mortgage payments, they want to see that you have a position waiting for you once your parental leave is over. You might also be required to provide a history of your income for the past couple of years, but that is typical of mortgage financing. Whether you intend to return to work after your parental leave is over or not, once the mortgage is in place, what you decide to do is entirely up to you. Mortgage qualification requires only that you have a position waiting for you. If you have any questions about this or anything else mortgage-related, please connect anytime. It would be a pleasure to work with you.

Luisa & Candice Mortgages 

Contact Me Anytime!

The best way to get ahold of me is to submit through the contact form below. However feel free to give me a shout on the phone as well.

Contact Us