Mortgage Insurance Rule Changes Enable Homeowners to Add Secondary Suites

indi Mortgage • January 2, 2025

As housing affordability challenges persist across Canada, innovative solutions are reshaping the way homeowners can contribute to housing supply. Starting January 15, 2025, new mortgage insurance rule changes will allow Canadian homeowners to access insured refinancing options to create secondary suites, such as basement apartments or laneway homes.


This move, announced in Budget 2024 and detailed by the Department of Finance Canada, is part of a broader strategy to increase housing density and improve affordability while offering homeowners the chance to generate additional income.


Why These Changes Matter

Historically, converting extra space into rental units has been both costly and mired in municipal red tape. Recent zoning reforms across Canada’s major cities, driven by Housing Accelerator Fund agreements, are reducing these barriers. The creation of secondary suites not only expands housing supply but also provides financial benefits to homeowners, such as offering seniors additional income to support aging in place.


Key Parameters for the New Rules

The new mortgage insurance program is designed to enable homeowners to build legal, self-contained secondary suites that comply with municipal requirements. Here are the essential details:

  • Eligibility Requirements
  • Homeowners must already own the property.
  • The homeowner or a close relative must occupy one of the existing units.
  • Additional units must not be used as short-term rentals.
  • Project Specifications
  • New units must be fully self-contained with separate entrances (e.g., basement suites, laneway homes).
  • Up to four total dwelling units are allowed, including existing units.
  • Financial Parameters
  • The “as improved” property value must be less than $2 million.
  • Homeowners can refinance up to 90% of the property’s value, including the enhanced value from secondary suites.
  • The maximum amortization period is 30 years.
  • Additional financing must not exceed the project’s costs.



When Do These Rules Take Effect?

Starting January 15, 2025, lenders can submit applications for mortgage insurance under these updated parameters. This applies to all eligible properties across Canada, provided the new units align with municipal zoning requirements.


What This Means for Homeowners

For homeowners with underutilized space, such as basements or detached garages, this new program offers an opportunity to increase property value and create a source of long-term income. By building legal secondary suites, homeowners can contribute to Canada’s rental housing market while gaining financial security.


A Step Toward Housing Solutions

As housing supply remains a pressing issue, these mortgage insurance changes reflect a commitment to practical, homeowner-driven solutions. Whether you’re a senior looking to age in place or a family seeking to maximize your property’s potential, these changes represent an exciting opportunity to invest in your home and your community.

Stay informed and explore your options with your lender to determine if this program is right for you. The path to unlocking your property’s potential begins in 2025.

Is It the Right Time to Refinance? 5 Signs You Should Consider It

By indi Mortgage • February 26, 2025
Refinancing your mortgage can be a smart financial move, but how do you know if it’s the right time? Whether you’re looking to lower your monthly payments, access home equity, or consolidate debt, refinancing can offer valuable benefits. Here are five key signs that it might be the right time to refinance your mortgage in Canada. 1. Interest Rates Have Dropped One of the most common reasons Canadians refinance is to secure a lower interest rate. Even a small decrease in your mortgage rate can lead to significant savings over time. If rates have dropped since you took out your mortgage, refinancing could help you reduce your monthly payments and save thousands in interest. ✅ Tip: Check with your mortgage broker to compare your current rate with today’s market rates. 2. Your Financial Situation Has Improved If your credit score has increased or your income has stabilized since you first got your mortgage, you might qualify for better loan terms. Lenders offer lower rates and better conditions to borrowers with strong financial profiles. ✅ Tip: If you’ve paid off debts, improved your credit score, or increased your savings, refinancing could work in your favour. 3. You Want to Consolidate High-Interest Debt Carrying high-interest debt from credit cards, personal loans, or lines of credit? Refinancing can help consolidate those debts into your mortgage at a much lower interest rate. This can make monthly payments more manageable and reduce the overall cost of borrowing. ✅ Tip: Make sure the savings from refinancing outweigh any prepayment penalties or fees. 4. You Need to Free Up Cash for a Major Expense Many Canadians refinance to access their home’s equity for renovations, education costs, or major life expenses. With home values rising in many areas, a refinance could help you tap into that value while still keeping manageable payments. ✅ Tip: Consider a home equity line of credit (HELOC) if you need flexible access to funds. 5. Your Mortgage Term is Ending, and You Want Better Terms If your mortgage is up for renewal, it’s the perfect time to explore refinancing options. Instead of simply accepting your lender’s renewal offer, compare rates and terms to see if you can get a better deal elsewhere. ✅ Tip: A mortgage broker can help you shop around and negotiate better terms on your behalf. Is Refinancing Right for You? Refinancing isn’t always the best move—there can be penalties for breaking your current mortgage, and not all savings are worth the switch. However, if you relate to any of the five signs above, it’s worth discussing your options with a mortgage professional. Thinking about refinancing? Let’s chat and find the best option for you!

How To Establish New Credit

By indi Mortgage • February 26, 2025
If you’re new to managing personal finance and you want to learn about credit, you’ve come to the right place. Establishing new credit is a bit of a catch-22. To build a credit history, you need credit. But it’s hard to get credit without having a credit history. So, where do you start? Well, the first thing you should know is that building credit takes time. It’s not something that happens overnight. If you’re looking to secure mortgage financing, you will want to have a minimum of two trade lines (credit cards, loans, or lines of credit) with a minimum limit of $2500, reporting for at least two years. If you don’t have any credit yet, the best time to get started is right now. However, that may be difficult because, as we've already identified, without a credit history, most lenders won’t feel confident about taking a chance on you. What’s the solution? Consider a secured credit card. With a secured credit card, you make a deposit upfront that matches the amount you want to borrow. A reasonable amount would be $1000 deposited on a single secured credit card. You then use your secured credit card to make household purchases and regular utility payments, paying off the total balance each month. If you default on the money borrowed for whatever reason, the lender will retain the money you put up as collateral. When looking for a secured credit card, be sure to ask whether they report to the two nationwide credit bureaus, Equifax and TransUnion. If the credit card company doesn't report, the credit card account will be useless for your purposes; move on until you find a company that reports to both credit bureaus. Once your secured credit card begins reporting to the credit bureaus, you begin to have a credit score; usually, this takes about three months. Now you can start to seek out a second trade line in the form of an unsecured credit card. Don’t forget to ensure that this card reports to both of the credit reporting agencies. Another option at this point could be a car loan. From here, you simply want to make all your payments on time! But what happens if you’re looking to secure mortgage financing before you have a fully established credit report? Well, if you have someone who would consider co-signing, you can certainly go that route. The mortgage application will depend on their income and credit report, but your name will be on the mortgage. Hopefully, when the mortgage is up for renewal, you’ll have the established credit required to remove them from the mortgage and qualify on your own. Although establishing credit takes a minimum of two years, it really begins with putting together a plan. If you’d like to discuss anything credit or mortgage-related, please get in touch!
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