The Canadian government is introducing new federal mortgage rules to encourage the construction of secondary suites, such as basement apartments or laneway homes, in the hopes it will help to ease the housing crisis.
As of January 2025, as a homeowner, you can tap into insured refinancing to build up to three self-contained rental units on your property.
These rules allow for a loan-to-value (LTV) ratio of up to 90% of the property's value, with a maximum amortization period of 30 years. The "as improved" value of the property cannot exceed $2 million.
Of course, you must comply with local zoning laws and you can't use the additional units for short term rentals, as that would defeat the intended purpose of increasing long term rental options.
The hope is to also stimulate construction and ease housing shortage, especially in high-demand urban areas, provide an income stream for homeowners and potentially ease mortgage costs.
With an average sales price of $1.1 million in the high-demand urban areas I wonder how many of these properties would still fall under the $2 million dollar mark once the improvements have been completed?
If you would like to chat more about this from a real estate point of view, call me at 416-467-8627 and let's chat, I would love to hear your thoughts on this.