Refinance Program

Refinance to Add Secondary Suites

The Refinance to Add Secondary Suites program is designed to assist existing homeowners add legal suites to their residence.

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Transaction Types

• Refinance for renovations transactions.
• Portable eligible.
• Advances managed through progress advance process. Inspections required to verify construction completion prior to advance. To be eligible for Canada Guaranty-managed draws, the improvement amount should be greater than 10% of the as improved value.

Amortization

• Maximum 30 years.

Credit Score Requirement

• Strong credit profile required.

Loan-to-Value Criteria

• Maximum 90% LTV for refinances to add legal unit(s).

Interest Rate Types

• Fixed, standard variable, capped variable and adjustable rate mortgages permitted.
• Borrower(s) must qualify at an interest rate that is the greater of the contract mortgage rate plus 2%, or 5.25%.

Property Types

• Maximum property value must be less than $2,000,000.
• Borrower must already own the property.
• Maximum 4 units upon completion of construction of the additional unit(s); 1 of the existing units must currently be occupied by the borrower or a close relative (i.e., related to the borrower by marriage, common-law partnership, or any legal parent-child relationship) on a rent-free basis.
• Newly built unit(s) must be legal, self-contained and comply with zoning and applicable by-laws.
• Property must not be used as a short-term rental.

Lending Value

• Lending value is the lesser of:
  • As improved value, or
  • As is (current) value plus improvement cost.

Borrower Qualifications

• Standard underwriting guidelines apply.
• Maximum debt service ratios: GDS 39% / TDS 44%
• Any existing debt, secured by way of a standard or collateral charge on the property, may be consolidated  into the insured first mortgage loan.
• The refinance loan may be increased by up to $3,000 to cover related transaction costs, such as penalties or fees.
• Borrower must intend to construct additional legal unit(s).
• Financing must not exceed the project costs.
• Low Doc Advantage™ and Maple Leaf Advantage™ borrowers are eligible for a refinance to add secondary suites.

Rental Income

• Rental income must be confirmed by a fair market rent assessment from an accredited appraiser approved by Canada Guaranty.
• Rental income from the legal unit(s) being constructed may be added to the borrower’s gross annual income for debt servicing purposes.

Basic Service (Lender Managed)

• Canada Guaranty orders appraisal from approved appraiser list.
• Lender orders inspections and authorizes draws according to established lender policy.

Full Service (Insurer Managed)

• Canada Guaranty orders appraisal from approved appraiser list.
• Canada Guaranty orders all inspections and authorizes required draws.
• Canada Guaranty will pay for up to 4 progress advance inspections.

Legal Suite Construction Criteria

• Before the initial advance of the loan, the lender must obtain an approved building permit (or the municipal equivalent) confirming the intent to construct legal, fully self-contained secondary unit(s).
• An occupancy certificate (or municipal equivalent, or a third-party report from a qualified professional with liability insurance) must be obtained to confirm legal unit construction is complete prior to final advance.
• Lender to provide plans/contracts/drawings outlining the work to be completed and borrower contact information at the time of initial loan submission to Canada Guaranty. A full appraisal will be ordered by Canada Guaranty.
• Property value is the lesser of:
  • As improved value, or
  • As is (current) value plus the improvement cost.
• Improvements must be for the purpose of constructing the legal unit(s). Any modifications to the existing unit are only permitted if necessary to complete the new unit(s).
• Construction completion to be verified through inspections by an appraiser.
• Any material changes to the construction plans after initial approval must be disclosed to Canada Guaranty and will be subject to readjudication.

Documentation Requirements

• Standard documentation.
• Lender to obtain confirmation from the borrower that the property will not be used as a short-term rental.

Applicable Premiums

NOTE: Mortgage insurance premiums are non-refundable.
* For existing Canada Guaranty-insured mortgages being refinanced, a top-up premium applies to new funds, provided premium portability requirements are met.

Last Updated: 03/2025