How New Mortgage Insurance Changes Are Opening Doors for Homeowners
Starting in January 2025, Canadian homeowners can take advantage of new mortgage insurance rules designed to help convert unused spaces, like basements and garages, into rental units. This government initiative offers new ways for homeowners to boost their income while increasing housing supply. Here are the key takeaways:
1. Creating New Opportunities for Homeowners
Recent zoning reforms in major Canadian cities have made it easier for homeowners to add secondary suites like basement apartments or laneway homes, boosting both home value and rental income potential.
2. New Mortgage Insurance Rules for Densification
As part of Budget 2024, the federal government is making targeted changes to mortgage insurance, encouraging homeowners to add more units to their properties, making it simpler to finance these improvements.
3. Insured Mortgage Refinancing Available in 2025
Starting January 15, 2025, lenders and insurers will offer a new insured mortgage refinancing product specifically for homeowners building secondary units.
4. Eligibility Requirements for Homeowners
To qualify, homeowners must already own the property, live in one of the current units, and the additional units must not be used as short-term rentals. The total property value must be less than $2 million.
5. Loan Conditions and Limits
Homeowners can refinance up to 90% of the property’s value, including the value added by the new rental suites. The maximum loan amortization is 30 years, and the new units must comply with municipal zoning regulations.
This new initiative is a game-changer for those looking to increase property value and create rental income, while also contributing to the availability of housing in Canadian cities. Contact your trusted Orbis Mortgage broker today to learn more about these exciting new opportunities and how they can benefit you.
