The federal government is rolling out another set of mortgage changes to tackle the housing shortage, this time focusing on creating more rental units. Starting January 15, 2025, homeowners can access up to 90% of their home’s value through default-insured mortgage refinancing to build secondary suites.

This is a huge win for homeowners looking to create rental income while helping ease the rental demand in cities like Toronto. The idea is simple: increase the rental supply and help homeowners offset their rising mortgage costs.

Deputy Prime Minister Chrystia Freeland said it best: “We must use every possible tool to build more homes and make housing affordable for every generation of Canadians.”

Here are the key details of the refinancing program:

Key Details:

• Maximum loan-to-value (LTV): You can refinance up to 90% of your home’s “as improved” property value, capped at a maximum property value of $2 million.
• Amortization period: You’ll get up to 30 years to pay off the refinanced mortgage, spreading out your payments over a longer term.
• Number of units: Homeowners can add up to four units, including the existing home.
• Self-contained units: Each suite must be fully self-contained (think private entrance, kitchen, bathroom)—meeting zoning requirements.
• No short-term rentals: These secondary suites must be for long-term rental use. So no Airbnbs here!

This announcement follows recent government initiatives like raising the cap on default insurance and reintroducing 30-year amortizations for some borrowers, as well as easing the stress test for switching lenders.

More Homes, More Solutions

Beyond the secondary suite incentives, the government is looking at other ways to unlock more housing. They’ve kicked off consultations on taxing vacant land, with the idea of encouraging landowners to stop sitting on unused lots and start developing.

They’re also adding more properties to the Canada Public Land Bank, with 14 more sites now available for development—bringing the total to 70. The aim is to turn these properties into new homes to keep up with demand.

What This Means for You

If you’ve been thinking about building a secondary suite, this is your chance to make it happen. With the new mortgage rules coming in 2025, you can access up to 90% of your home’s equity to create additional rental income and support the local housing supply.

Ready to unlock your home’s potential? Connect with Me today to learn how you can tap into your home’s value and make your property work for you!