Refinance Up to 90% Instead of the Canada Secondary Suite Loan Program

The Canada Secondary Suite Loan Program is cancelled, and the federal loan never lent anything. Budget 2025 (November 4, 2025) gives its current status: the loan program was not yet operational and will not be implemented, because it had a large potential to overlap with the homeowner insured mortgage rule changes announced in January 2025 [Budget 2025].

One of those changes, a CMHC-insured refinance for adding a suite, opened to borrowers that same month, on January 15 [Finance Canada], and CMHC still lists it on its refinance page [CMHC]. If you were holding off on a suite until the loan opened, the budget's wording means it won't.

Up to 90 per cent of what your home will be worth once the suite is finished, through a CMHC-insured refinance, as long as that as-improved value is below $2,000,000 [CMHC]. With the loan program gone, it is the federal route a homeowner can use now.

The refinance has been available since January 15, 2025, and the mortgage can be amortized over up to 30 years [Finance Canada]. The 90 per cent caps the whole insured mortgage, not the suite budget, so what you already owe counts against it. Your room for the suite is the gap between your current balance and 90 per cent of the finished value.

It was announced twice, and the offer grew the second time. Budget 2024 (April 2024) proposed $409.6 million over four years, starting in 2025-26, for CMHC to launch the program, with low-interest loans of up to $40,000 for homeowners adding a secondary suite [Budget 2024]. In December 2024 the Deputy Prime Minister announced the limit would double to $80,000, on 15-year terms at two per cent [Finance Canada].

What was promised, next to what you can get:

A suite budget that counted on $80,000 at two per cent now has to be rebuilt around the refinance, where the borrowing limit rises and falls with the value of the finished house.

You qualify if you own the home and you, or a close relative, live in it [CMHC]. A house you rent out in full, with neither you nor a relative living there, does not fit the rule.

The finished home can have up to 4 units, counting the one already there, and still be insured at up to 90 per cent. The new suite has to be self-contained [CMHC].

CMHC's 4-unit limit is about what it will insure. What your lot may hold is a zoning question. Ontario's Planning Act overrides local zoning bylaws to permit up to 3 residential units in most existing urban residential areas: 3 in the main house, or 2 in the house and 1 in an ancillary building [Ontario Municipal Affairs and Housing]. A fourth unit falls outside that provincial permission, so your municipality's own zoning bylaw decides it. Check the bylaw before a lender values the house as if the fourth unit were already there.

A second unit in a house needs a building permit, and the Building Code calls for a 30-minute fire separation between the units and between each unit and any common area [Government of Ontario]. Egress, ceiling height and the rest of the code are in our guide to legal basement apartment conversions in Barrie. Have the permit drawings settled before you sign for financing.

CMHC has to approve the insured financing before construction starts, or at least at an early stage, and the lender then advances the money in progress draws as the work goes [CMHC]. Apply to the lender first and start building after it approves.

The County of Simcoe's suite funding brings a second approval and a deadline that starts when you sign its loan agreement, both covered below. Put together, the rules point to this order:

1. Confirm the zoning and get the permit drawings done.
2. Get the lender's approval for the CMHC-insured refinance.
3. If you are applying to the County, sign its loan agreement after the lender has approved.
4. Start construction, paid for in stages through the progress draws.

The County of Simcoe's Secondary Suites Program is a forgivable loan; our Barrie legal suite grant guide covers the amount and how it is forgiven. Its 2025-2026 terms put limits on when the build starts, how the County pays and what the suite can be rented for [County of Simcoe]. Confirm the current intake and figures with the County before you plan around them.

Once the County approves the funding and the loan agreement is signed, construction has to begin within 90 days and should be finished within 180 [County of Simcoe]. Those 90 days run whether or not your lender has approved the refinance, which is why the lender goes first. Applicants who already hold a building permit get priority [County of Simcoe], so the permit belongs ahead of the County application too.

The two sources of money pay out on different triggers. The insured mortgage comes as the lender's progress draws [CMHC]. County payments go to you, not the contractor, after the plumbing, framing and insulation, drywall and fire separation, and final or occupancy inspections pass, and the County wants proof of those passes and of what you have paid [County of Simcoe]. Each stage is paid for before its County payment arrives, and the draws carry the bills in between.

The County's amount depends on what the suite costs to create and on the equity in your home [County of Simcoe]. A refinance up to 90 per cent borrows against that same equity, so ask the County how it treats a new insured mortgage before you settle on the size of the refinance.

Rent, utilities included, is capped by area. Maximum rents for the 2025-2026 program year [County of Simcoe]:

Bradford West Gwillimbury's caps are below Barrie's at every unit size. The incoming tenant household has to earn under $84,000 gross, the limit set for the County, Barrie and Orillia, and the finished suite has to be rented within two months [County of Simcoe]. That fits CMHC's rule against renting for less than 90 consecutive days: a lease of at least that long to a tenant under the income limit meets both.

County applicants also declare that they cannot claim the same repairs under any provincial tax rebate or other rebate program [County of Simcoe]. If you were counting on the federal multigenerational home renovation tax credit for the same suite, ask the County how that declaration applies first.

Legal suites are part of our basement renovations, and we have built 30+ of them. Ours average 6 to 8 weeks, including permit approval time, and that is the stretch the lender's progress draws and any County payments are spread over.

We build fire-rated assemblies between units in legal suites. On a County-funded suite, that work is what the drywall and fire separation inspection checks, and passing it releases one of the County's payments [County of Simcoe].

The County asks for a contractor with liability and WSIB insurance, and for a qualified electrician on all electrical work [County of Simcoe]. We are licensed, insured and WSIB covered, and licensed trades do our electrical and plumbing. Our detailed, itemized quote sets out what the suite costs to create, one of the two figures behind the County's amount, so have it before you apply.