The initiative aims to make it easier and more affordable for Canadians to create additional living spaces for family or rental purposes, supporting housing needs in high-demand areas like Toronto. CMHC's involvement ensures that these mortgages are insured, providing greater flexibility for lenders to offer this option.

Deputy Prime Minister and Minister of Finance Chrystia Freeland unveiled the product during a recent press conference. She explained that eligible homeowners would be able to amortize their refinanced mortgages for up to 30 years, with the maximum property value capped at $2 million. “That latter figure,” Freeland noted, “is a recognition of conditions in the Greater Toronto Area.”

Further eligibility criteria were also outlined, with a key requirement being that the secondary suite must be occupied by the borrower or a “close relative.” While no details were provided on how this condition would be enforced, the initiative is expected to boost secondary suite construction, including options such as basement flats, garden suites, and laneway housing.“

The idea here is to make it easier for people to build a secondary suite in your home, for someone to build a basement flat, a garden flat, laneway housing,” Freeland said. “This is all about gentle density — creating more homes for Canadians to live in. It builds on the Secondary Suite Loan Program, which was announced in the Budget.”

This program is designed to help homeowners create additional living spaces like accessory dwelling units (ADUs) and garden suites, supporting the growing demand for multi-generational living and rental accommodations.

SUMMARY
In basic terms....this new mortgage refinancing product suggests that homeowners can access funds based on the future value of their property, including the value added by the secondary suite (like an ADU). This means you can refinance your mortgage before actually building the ADU in your backyard. The program allows homeowners to borrow against the projected increased value of the property after the ADU is built, helping fund its construction. Essentially, it enables you to finance the building of the ADU by refinancing based on the anticipated boost in property value once the suite is completed.

Therefore, if your property is currently worth $1,000,000, you can borrow up to $900,000 (90% of the property value). After adding an ADU that increases the property’s value by $350,000, bringing the total property value to $1,350,000, you would be able to borrow up to $1,215,000 (including all existing and new mortgages and loans). This gives you an additional borrowing potential of $315,000 to help cover the costs of building the ADU. ​Speak with your mortgage advisor and get ready to build your new FlexoBuild home!