Financing a legal basement apartment in 2026
The federal $80,000 loan at 2% that homeowners still ask about was never launched; Budget 2025 confirms the Canada Secondary Suite Loan program "will not be implemented." What remains is the CMHC refinance route: an owner-occupied home can be refinanced with mortgage insurance to 90% of its as-improved value, up to four units and a value below $2 million, amortized over up to 30 years, as long as the money builds the suite and CMHC approves the financing before construction starts. The application needs quotes, plans and a permit, which is the paperwork we produce anyway.
Does the suite fit inside a refinance?
Three numbers decide it. CMHC lends against the lesser of the as-improved value and the as-is value plus the improvement cost, so this example treats the suite cost as the value it adds. A planning tool, not a mortgage approval; your lender runs the real one.
Worked exampleCMHC refinance rules
The suite fits with room to spare.
Premium is CMHC's rate for the loan-to-value band, charged on the increase or on the total loan, whichever is less; a 0.20% surcharge applies past 25 years of amortization. Values at or above $2,000,000 do not qualify. Rent range from the Desire Basements 2026 GTA cost report.
The rules, as CMHC publishes them
Everything on this list comes from CMHC's refinance product page, read in October 2026. It is a quick reference and CMHC says so; your lender confirms the current terms.
- WhoYou already own the home, and you or a close relative (spouse, parent, child, rent-free) live in it. Canadian citizens, permanent residents, or non-permanent residents authorized to work in Canada.
- How muchUp to 90% loan-to-value for a home with up to four units, including the existing ones. The lending value or as-improved value must be below $2,000,000.
- AmortizationUp to 30 years. Existing amortization can be kept, blended or reset.
- What the money is forConstruction and completion of the suite only. No equity take-out.
- WhenInsured financing must be approved by CMHC before construction starts, or at least at an early stage.
- The suiteSelf-contained, compliant with applicable by-laws and regulations, and never rented for less than 90 consecutive days. No short-term rentals.
- CreditA minimum score of 600 for at least one borrower or guarantor. Gross debt service up to 39%, total debt service up to 44%, qualified at the greater of the contract rate plus 2% or 5.25%.
- PremiumFrom 0.60% of the total loan at 65% LTV to 3.10% at 90%, or 6.25% on the increase only in the top band, whichever is less.
Source: CMHC, Refinance for Building Secondary Suites, mortgage loan insurance homeowner programs. cmhc-schl.gc.ca. Department of Finance, 2024 Fall Economic Statement, secondary suite measures effective January 15, 2025. canada.ca
What CMHC asks for, and what you already have from us
The itemized quote, every line priced from the quote sheet, delivered within 24 to 48 hours of the free in-home visit. A lender can read it room by room.
The free 3D design and the permit drawings, prepared and stamped by a licensed structural engineer.
We file it with the municipality and manage every inspection. The permit number goes to your lender the day it issues.
The closed permit, and in cities that register suites (Mississauga, Brampton, Barrie, Markham, Oshawa, Whitby, Pickering) the registration certificate. Toronto, Vaughan and Richmond Hill do not run a registry; the closed permit is the record.
Timing is the part people get wrong. CMHC wants the financing approved before the first wall comes down, so the quote and drawings have to exist before the loan, not after. Our sequence already works that way: visit, 3D design, itemized quote, engineer-stamped drawings, then permit, then construction, about three months for a legal suite with a written completion date backed by our $200 a day on-time guarantee.
Two programs people still ask about
The Canada Secondary Suite Loan Program. Announced in Budget 2024 at $40,000, doubled to $80,000 at 2% over 15 years in the December 2024 Fall Economic Statement, due to launch in early 2025. It never opened. Budget 2025's expenditure review states that the program, "which is not yet operational, will not be implemented," citing overlap with the insured refinancing rules above.
The Canada Greener Homes Loan. Interest-free, up to $40,000 over ten years, for energy retrofits. Natural Resources Canada lists it as closed; the loan portal reports funding fully committed as of March 31, 2026. It never covered a suite anyway, only insulation, windows and heat pumps.
What is left for the monthly side is ordinary: a home equity line, a conventional refinance without insurance below 80%, or the payment plans on our financing page. The rebates page covers the grants and credits that reduce the bill rather than spread it.
Sources: Budget 2025, Comprehensive expenditure review, planned reductions by organisation, Canada Mortgage and Housing Corporation (budget.canada.ca); Natural Resources Canada, Canada Greener Homes Loan (natural-resources.canada.ca).
Financing questions
Is the $80,000 Canada Secondary Suite Loan still available?
No. The program was announced for early 2025 but never launched, and Budget 2025 states it "will not be implemented" because it overlapped with the insured refinancing changes that took effect January 15, 2025. Those refinancing rules are the route that remains.
How much can I refinance to build a basement apartment?
With CMHC mortgage loan insurance, up to 90% of the home's as-improved value for a home with up to four units, provided the value stays below $2,000,000, the home is owner-occupied, and the money goes only to building the suite. The refinanced mortgage can be amortized over up to 30 years.
What documents does CMHC need for a secondary suite refinance?
Improvement lists and cost estimates or quotes, building plans, the building permit, and an occupancy permit or a third-party report from a qualified professional confirming by-law compliance. Desire Basements supplies the itemized quote, the 3D design, engineer-stamped permit drawings and the closed permit or registration certificate.
Can I rent the suite on Airbnb if I used the CMHC refinance?
No. CMHC requires that the suite not be rented for less than 90 consecutive days. Long-term tenancy is the condition of the insurance.
Does the suite pay for its own financing?
GTA legal suites rent for $1,700 to $2,400 a month in 2026, so a $95,000 suite at $2,000 a month pays back its gross cost in about four years. Whether the rent covers a given monthly payment depends on your rate and amortization; the rental income guide walks through it.
Get the quote the lender wants.
A free in-home visit, a free 3D design and an itemized quote within 24 to 48 hours, in the order CMHC asks for it. Start with the cost calculator or the legal basement apartment page.